The Federation of Master Builders (FMB) has launched an updated ‘Developers’ Guide’, backed by United Trust Bank (UTB) and Openreach, aimed at helping small and medium-sized enterprise (SME) builders move into housebuilding.
The guide comes as the UK continues to miss its target of 1.5 million new homes by 2029, needing 300,000 homes a year, a rate last seen in the 1960s.
SME housebuilders now deliver around 10% of new homes, down from 40% in the late 1980s.
Recent FMB research found half of SME builders saw the planning system as the biggest barrier to new homes, with only 11% saying their local authority processed applications efficiently.
60% said access to small sites was poor, with high land prices and competition from larger developers holding them back.
42% said finance was a major barrier, often relying on personal funds or small lenders.
Many said they would build more affordable housing if these barriers were removed.
The new 2025 guide gives step-by-step support, covering modern construction methods, digital tools, site assessment, finance including the upcoming national housing bank and green homes advice, and new planning rules.
It includes updated information on the future homes standard, energy efficiency, biodiversity exemptions for small sites and building safety rules.
The guide also points builders to support for skills and workforce development.
Kev Wilson, director at Kev Wilson Builders Ltd, said: “My biggest piece of advice to any builder thinking about becoming a developer is: do your homework and question everything.
“We naively bought a plot of land that came with planning permission and just built what it said, when we should have challenged it and changed it to maximise the opportunity.
“We essentially broke even on what should have been a profitable project.”
Wilson added: “If I was doing it again, I wouldn’t do anything the same.
“Before you start, get everybody contracted in on a fixed price so you know exactly what you’re going to make before you begin.
“Don’t rush in – really scrutinise the planning, challenge it if needed, and make sure the numbers stack up properly.”
He said: “I genuinely believe that if you’re looking at anything under £300,000, you’re not going to make any money in today’s market because land is expensive and all the regulatory requirements.
“I’d be happy if the Government knocked on my door today and said, ‘Can you build me an estate with ten houses on and I’ll give you a twenty per cent margin on your cost?’
“I’d be there Monday morning. We’ve got the trades out there, we’ve got the smaller companies that would do that work with passion, but we need to make a profit to keep the business viable.”
He added: “The bigger developers won’t build affordable housing unless there’s some sort of subsidy because the margins aren’t big enough for them, but smaller builders like us would absolutely do it if there was proper support.
“We’re not short of £400,000-500,000 houses everywhere; what we’re short of is anything from £180,000 to maybe £250,000, and those houses won’t get built by the big developers without incentives.”
Chris Carr, president of the FMB, said: “There’s nothing more disappointing, or frankly, more saddening to me than seeing the decline of small housebuilders in the UK.
“Back in the late 1980s, small builders delivered over 40% of new homes in this country.
“Today, that figure has fallen to less than 9%. That’s not just a statistic, it’s a sign that something has gone badly wrong.”
Carr added: “We need to change course, and we need to do it together.
“This isn’t just about economics or market share, it’s about reviving a tradition, opening doors to new talent, and ensuring local trades and small developers have a place in shaping the communities of tomorrow.
“But let’s be honest, it’s not as easy as it used to be. Finding land is tough.”
He said: “The planning system is complex and frustrating. Then there’s meeting new building regulations and marketing the homes. It’s a mountain to climb, especially for those just starting out.
“That’s why this guide has been created by small and micro developers, for those looking to take their first steps into small-scale housing development.
“Written in plain English with no jargon, it breaks the whole development process down into clear, practical stages – from site finding and planning to construction and sales.”
He added: “If we want a thriving, diverse, and resilient housing sector in this country, we need small builders back in the game. This guide is here to help make that happen.”
Adam Bovingdon, head of property development at UTB, said: “United Trust Bank is delighted to sponsor this important guide championing the next generation of local house builders and developers.
“The UK needs more quality homes delivered by skilled SMEs rooted in their communities, and we believe practical, no-nonsense guidance like this can help talented builders take that confident step into housebuilding.
“For those already on the journey, we hope it supports you to scale sustainably, building stronger businesses, creating local jobs and nurturing future skills.”
Bovingdon added: “UTB has a long track record of backing ambitious SMEs with responsive funding and specialist expertise.
“We have become long term partners to many small developers, supporting their ambitions and helping them to evolve into substantial regional housebuilders, and we’re committed to helping this vital part of the sector thrive.
“We look forward to seeing this guide inspire new entrants and empower smaller participants to grow into the successful developers of tomorrow.”
Andy Neilson, senior manager, new sites at Openreach, said: “We’re proud to support the Federation of Master Builders’ launch of the Developers’ Guide.
“This resource will empower builders and developers with the practical insights they need to deliver high-quality homes, underpinned by robust infrastructure.
“As the UK’s digital network provider, we know that connectivity is now as essential as water or electricity – and we’re committed to working alongside developers of all sizes to ensure every new home is ready for the future.”
Neilson added: “Openreach has a national Full Fibre proposition for sites starting at just single plot builds, all the way through to large scale developments of hundreds of new homes.”
