SME builders cite affordability as key barrier for FTBs, survey reveals
The survey from Close Brothers Property Finance, HBF and Travis Perkins found affordability pressures, especially for FTBs, are constraining demand and making it harder for SME builders to bring forward new sites.
Affordability for first-time buyers (FTBs) is holding back new housing delivery, with 84% of small and medium-sized enterprise (SME) home builders identifying the lack of support for FTBs as a barrier to growth, a survey by Close Brothers Property Finance, Home Builders Federation (HBF) and Travis Perkins found.
The survey was released during New Homes Week, which focused on the theme ‘Power to Move’.
The research found affordability pressures, especially for FTBs, are constraining demand and making it harder for SME builders to bring forward new sites.
SME developers said with the right support they could deliver up to 100,000 extra homes a year, with one suggestion being a new equity loan scheme part-funded by developers.
Data from the HBF showed homeownership has continued to fall, down to 64.8% in 2024 from 71% in 2003.
Slower sales hit SME builders’ cashflow and ability to start new schemes.
Phil Hooper, CEO of Close Brothers Property Finance, said: “SME house builders 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, CEO of the Home Builders Federation, said: “SME home builders 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.”
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