Unleashing the power of SME housebuilders

The majority of our homes are built by the top 20 housebuilders who are focused on a particular type of development opportunity that will inevitably require scale. The housebuilding sector historically has always had a strong SME cohort, however their impact has been diminishing over the past few decades.

Unlocking the potential

• Homes England has identified unlocking the potential of SMEs as one of its key objectives (HE Strategic Plan 2018-2023)
• SMEs need to be financially supported in a way that recognises they do not have dedicated departments available to fill in long winded forms
• Funding costs need to be competitive and not penalise the SME against the larger organisations
• Using the financial guarantee provided by housing site Sales Guarantees.

New entrants

• Difficulty for start-ups to attract appropriate funding which tends to encourage an inefficient and protracted business model through organic rather than structured growth
• Venture capitalists can find construction a relatively unattractive sector when compared to technology for example
• Initial support from new models addressing the barriers to entry is having a real impact on overcoming these historic problems in the SME sector.

Source

Housebuilder Magazine – November 2021