SME builders give thumbs up to £150m to kickstart ‘made to order’ homes

Smaller builders could benefit from a £150m ‘help to build' fund to make it easier for people to commission a bespoke home.

The government initiative is aimed at creating a level playing field between first-time buyers of newly built homes, who benefit from ‘help to buy', and those who want to build their own home.

Housing secretary Robert Jenrick said: "Building your own home shouldn't be the preserve of a small number of people, but a mainstream, realistic and affordable option for people across the country. That's why we are making it easier and more affordable - backed by over £150m new funding from the government."

The scheme will provide an equity loan on the completed home, similar in principle to the help-to-buy initiative.

The fund is part of an action plan to boost custom and self-built homes including revisiting the right to build legislation and allocating more funding for the right to build task force. Prime minister Boris Johnson has appointed Conservative MP Richard Bacon to lead a review for scaling up the sector.

Mr Johnson said: "Self-build and custom housebuilding can play a crucial role in increasing choice for consumers and ensuring people can live in the homes that they want, and that are designed to meet their needs. We know that self and custom builders deliver high quality, well-designed homes that are energy-efficient, accessible, affordable, and welcomed by their communities."

Compared to other European countries such as Germany, the UK has a small self and custom-build sector. The government hopes to increase the number of self and custom-built homes to 30 to 40,000 a year.

It sees the help-to-build fund as part of its wider ‘plan for jobs' aimed at boosting SME builders who are estimated to account for one in ten new homes.

Site shortage holding back SME activity

The Federation of Master Builders, FMB, said the new fund was positive but stressed the government must address the lack of sites for development.

FMB chief executive Brian Berry said: "With almost one in two SMEs saying their output is hampered by a ‘lack of available and viable land', local authorities must allocate more small sites in their local plans for incremental development."

He added more funding for time-poor local authority planning departments to help them make quicker planning decisions was important.

The National Custom and Self Build Association, NaCSBA, chief executive Andrew Baddeley-Chappell agreed that more parcels of land would be crucial for supporting the sector.

"These could be single plots, small developments and or larger sites that have been subdivided to include capacity for plots. There are big opportunities for those able to focus their businesses on delivering all aspects of the homes and communities that people want," he said.

The National Federation of Builders warned that unless local authorities allocated land and granted permission for self and custom-builds then the government's housing market reforms would fail.

Brokers Hank Zarihs Associates said development finance lenders had said for some time that more available sites and a quicker planning process were instrumental in fostering SME builders.

Mr Berry stressed that SMEs trained the majority of apprentices and recruited locally so were crucial to fostering employment in communities across England.