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Centre for Policy Studies calls on govt to help SMEs diversify housing supply

Jake Carter

April 15, 2021

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The top 10 house builders currently build 40% of all new homes, with the top six controlling around 33% of the market, according to the Centre for Policy Studies.

A report by the Centre for Policy Studies, which has been praised by Housing Minister Chris Pincher, has therefore called for changes to the planning system to open up the market and allow better access for small and medium sized companies (SMEs) and diversify the housing supply.

Facing challenges to obtain land, smaller builders face being squeezed out of the system – falling from building around 40% of homes in the 1980s to around 10% now.

The six biggest house builders alone currently have roughly one million plots in their strategic land banks, nearly the equivalent of the target supply across England over the next five years.

The report sets out three key reforms that the think tank argues must be made to address the systemic failures in the current system and support delivery of more homes.

These include changing permissions to delivery contracts, a renewed emphasis on the Housing Delivery Test and introducing panels of local house builder SMEs.

Since the 1960s, housing supply has fallen steadily each decade, and that attempts to fix this have mostly focused on increasing the number of planning permissions flowing through the system.

However, while the 2010 planning reforms led to permissions rising to over 350,000, the number of new homes actually built was just over 200,000.

Alex Morton, head of policy at the Centre for Policy Studies, said: “The government’s planning reforms are very welcome. But we need to focus on delivery and learn from previous attempts to fix England’s housing supply problems.

“The reforms we are proposing would help create a new, better planning system that focuses on ensuring delivery, working alongside the other proposals government is bringing forward.

“We have a once-in-a-generation opportunity to fix these issues, and with a Planning Bill under way, now is the time for action.”


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