A survey, the SME State of Play – produced by Close Brothers Property Finance, the Home Builders Federation (HBF) and Travis Perkins to mark New Homes Week (2-8 February) – found that 84% of SME housebuilders said this lack of support was preventing the ability to bring forward new sites.
According to respondents, the right support for aspiring homeowners could boost delivery by as many as 100,000 additional new homes each year.
One idea proposed was an equity loan scheme part-funded by developers.
The research suggested that support for first-time buyers had been limited since the closure of the Help to Buy scheme in 2023, adding that the Mortgage Guarantee Scheme only accounted for 1.4% of all residential mortgages between 2021 and 2025.
Further, recent research for HBF showed that homeownership rates were falling, with 64.8% of households being homeowners in 2024, down from 71% in 2003.
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It said lower homeownership levels impacted the cash flow of SME housebuilders, the repayment of development loans and their ability to start new schemes. It said that the longer affordability pressures impacted homeownership, there was a risk of stalled delivery, a lack of housing diversity, limits to local job creation and a worsening of the housing shortage.
Phil Hooper, CEO of Close Brothers Property Finance, part of Close Brothers Group plc, said: “SME housebuilders are ready and willing to build, but affordability constraints are holding back both buyers and developers.
“The government has made encouraging progress on planning reform, but without effective demand-side support, particularly for first-time buyers, that progress risks being undermined. Addressing affordability is critical not only for housing delivery, but for wider economic growth and local job creation.”
Neil Jefferson, chief executive of the HBF, added: “SME homebuilders play a vital role in delivering high-quality, locally responsive housing across the country, but they are highly exposed to changes in demand. Unlocking demand is essential if we are to increase supply and reverse the long-term decline in homeownership.
“Without targeted demand-side support – particularly to help first-time buyers access the market – the sustainability of housing demand and long-term market stability remain under threat.”
