FMB publishes the results of its 2023 House Builders’ Survey

The annual FMB House Builders’ survey focuses specifically on micro, small and medium-sized (MSME) house builders in England. In fact, 65% of the FMB members surveyed say they typically work on single unit sites and that house building is just part of the work that the business takes on. The survey looks at various factors including the main barriers to house building, buyer demand, the planning application process and workforce and skills.

Main constraints on supply

When asked what the main barriers are to building more homes, both now and over the next three years, the planning system was identified by the largest number (55%) of respondents. Restricted mortgage availability was the second biggest reason with 51%, and this is an issue that a similar number (49%) say will persist for the next three years. The lack of available land is also a problem (48%) and respondents say this will worsen in the coming years with 53% seeing this as an issue over the next three years.

However, there were also positives from the survey results. While material costs are still a significant barrier for MSME house builders, identified by 43%, respondents believe that this will improve in the coming years, with only 23% predicting it will be a barrier in three years’ time. It is worth noting that 94% of respondents said that it has become more expensive to build homes in the past year.

Buyer demand

The report shows that the buyer demand that house builders are seeing has dropped to its lowest level since the survey was first conducted in 2015. On a scale of 0 (very low demand) to 5 (very high demand) the average score was just 1.99, dropping significantly below the previous, pandemic impacted low of 2.38 in 2020.

Small sites and land availability

For MSME house builders, both access to land for building and the ability to build on small sites impact their work. The survey found that both availability of land (48%) and the viability of the land (34%) are significant barriers. A large number of respondents (63%) said that small site opportunities are decreasing. However, this represents a significant improvement from the 82% in 2022. In addition to the shortage of the right kind of sites, the survey also found that 60% reported that obtaining planning permission for small sites is becoming more challenging.

Workforce and skills

The majority (57%) of the house builders surveyed said that they will be keeping their workforce the same size in the next year, while 24% said they would be increasing the number of people they employ. However, this good news was tempered slightly by the 12% of businesses that said they would be decreasing the size of their workforce, up from 6% in 2022. In terms of upskilling their team, 50% said they had done so in the past year, up from 46% in 2022.

The future of housebuilding

When asked about the Future Homes Standard, which will be implemented in 2025, 68% said they were aware of it, but a large number (30%) were not. Of those who knew about the Future Homes Standard, more than half (55%) said they expected it to increase costs and almost a quarter (24%) believe it will increase administrative work.

Concerningly, 71% of those surveyed do not feel confident that they understand the Biodiversity Net Gain regulations that come into force for small sites in April 2024. The results also highlighted a perceived lack of support with 42% saying they want guidance from their local authority and 17% saying they need to know who to talk to about it.

It has been an undeniably tough year for house builders. The results of the FMB House Builders’ Survey clearly highlights some of the challenges that smaller house builders are facing, but also provides some hope that these will ease in 2024 and beyond.