The ‘SME State of Play’ report details the findings of one of the most comprehensive surveys of Small and Medium Enterprise (SME) housebuilders, conducted by the Home Builders Federation (HBF), Close Brothers Property Finance and Travis Perkins.
The HBF writes:
The 2025/26 report, published Tuesday 4 November, shows:
- 97% say business taxation and the regulatory environment are barriers to the growth of their business in the next 12 months.
- Financial pressures were a big barrier, with 64% citing cumulative viability pressures and 58% citing difficulties obtaining offers for S106 Affordable Homes.
- Regulatory and political challenges remain significant barriers; 66% report local or political opposition, 55% Biodiversity Net Gain and 54% the Building Safety Levy.
- 94% of SME builders cite securing planning permission or discharging conditions as a major issue.
- 89% of SME builders view Local Authority capacity as a major constraint
- Land and infrastructure issues also continue to limit delivery, with 54% citing land prices, 39% citing land availability, and 49% the costs/timescales for utilities provision.
- Construction and supply challenges are notable but viewed to have less impact with 43% citing labour/supply costs and 41% cost of materials as major barriers to growth. While 67% of respondents said the supply chain and materials availability were a barrier to growth, only 10% said it was a major barrier.
Despite Government announcing a package of measures to support SME developers earlier this year, systemic and long-standing issues remain unresolved. Bottlenecks in the planning process persist, leading to mounting costs and delays that disproportionately impact smaller businesses – with 94% of SMEs citing delays in securing planning permission as a major barrier to housing delivery.
Affordability constraints, particularly among first-time buyers, are a key concern for SMEs (84%), reinforcing support for the reintroduction of a Government-backed equity loan programme to help more people onto the housing ladder and stimulate market demand. Meanwhile, just under two-thirds (65%) of survey respondents said difficulty in securing suitable bids from Registered Providers of Section 106 Affordable Housing presented a barrier in the planning process and 58% reported that it was a major barrier to growth.
