Number of SME builders plummeted by 80% since 1980s

Research from Sirius Property Finance has revealed why recently introduced government measures to help boost the number of SME property developers are desperately needed, with numbers of SME builders falling significantly since the late 1980s.

The report shows that in 1988 there were over 12,000 SMEs operating across England, delivering over 77,500 new homes to the market. This was 40% of all new homes with an estimated market value of over £4.6bn.

However, since then the number of SME housebuilders has dropped dramatically, with only 2,500 SMEs currently operational across England according to the latest data.

As a result, the number of new homes built on an annual basis by SMEs has reduced from 40% in 1988 to just 12% now.

SMEs have faced a range of challenges since the 1980s, including two financial crashes and growing competition from big housebuilders.

In February, the government’s housing accelerator, Homes England, in partnership with the United Trust Bank, announced a £250m fund aimed at supporting SME builders.

Managing director of Sirius Property Finance, Nicholas Christofi, said: ‘Although it’s great to see the government finally recognise the importance of SMEs and the role they play in delivering much needed housing stock, it’s fair to say that this support is long overdue and perhaps too little too late.

‘In the last three decades, they’ve come close to extinction due to a range of factors, but most notably due to competition from the big housebuilders and, as a result, the number of operational SMEs has plummeted.

‘Hopefully, we will now see a reversal in this downward trend and the number of SMEs will once again start to climb. While the big housebuilders do an admirable job, greater variety and competition within the sector can only be positive and will force standards and quality of output to climb across the board.’

In related news, digital tools to help local people have a say in the planning process will be trialled in 13 areas across England.

Photo by Callum Hill