Planning still biggest obstacle for SMEs

The stretched planning system remains the biggest barrier to building for SME housebuilders, according to the latest State of Play report.

The survey by Close Brothers Property Finance, the Home Builders Federation (HBF) and Travis Perkins, released today (January 22), reveals that 93% of SMEs cite delays in obtaining planning permission as a major obstacle to growth. Meanwhile, 91% state that local authority planning departments are under-resourced, hampering SMEs’ growth. This is the fourth consecutive year of the survey in which these two elements have been the top two barriers.

And 46% of SME housebuilders report an increase of more than 30% over the past three years in the costs of obtaining planning permission. The authors noted that this was before December’s planning fee rises were introduced.

Meanwhile, only 13% of SME respondents believe the government’s current approach to housing and planning is helpful to first time buyers, down from 39% in 2022.

Rising interest rates are also identified as a significant block to increasing SME housing delivery, with 72% citing the issue. The report notes that the Bank of England’s 14 consecutive rate hikes “hit the sector particularly hard”, with higher borrowing costs and the …