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Restoring SME Housebuilding to Historic Levels Could Provide Extra 55k Homes

New research by Savills, commissioned by LDS Sales Guarantees, has revealed the current scale of delivery and pipeline of SME housebuilders sites.

The Savills report estimates that 370-550 small house led sites (equating to c. 9,000-14,000 new homes) are being delivered in England and Wales per year. It also reveals there are 136,000 homes yet to start construction or gain consent on small house led sites with an estimated development value of around £40bn.

In 1988, SME housebuilders built 39% of homes in England. This had dropped to just 12% by 2017, and even further to 10% by 2020, according to the Home Builders Federation. An estimated 22,060 new homes per year were delivered by SME housebuilders in 2019.

This drop is equivalent to the loss of at least 64,000 homes per year, compared to if SME housebuilders were still delivering 39% of housing supply. The gross development value of these lost 64,000 homes is £20bn.

Analysis shows that LDS Sales Guarantees increases access to debt and reduces developer equity requirements by around 77%, therefore enabling SME housebuilders to create 3 to 4 times more housing output with the same equity than via traditional financing routes.

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