Small housebuilders show optimism despite challenges

​​​​​​​The Federation of Master Builders (FMB) unveiled its 2025 Small Housebuilders' Survey at its Winter Parliamentary Reception on the House of Commons Terrace

FMB’s 2025 Small Housebuilders' Survey reveals encouraging signs of confidence among small builders alongside persistent challenges that continue to hinder the sector.

The survey of 169 housebuilders found that 73% anticipate robust buyer demand, 69% are planning to increase their workforce, and 68% believe the Government's planning reforms can help diversify the market and boost the number of small developers.

However, Brian Berry, chief executive of the FMB, highlighted ongoing concerns about the decline of small housebuilders, noting that their share of new homes has fallen dramatically from 40% in the 1980s to just 9% today.

"This decline is not just bad for local house builders, it is bad for consumer choice, it is bad for the range of design being made available, and it is bad in terms of delivery," Berry said.

The survey also revealed significant barriers: two-thirds of respondents reported they are unable to pursue sites due to anticipated Section 106 costs, and over a third stated that the process for obtaining planning permission is getting worse.

Baroness Taylor of Stevenage, Parliamentary Under Secretary of State for Housing and Local Government, announced that the Government has launched changes to the National Planning Policy Framework.

"We've simplified planning for sites under nine homes. Such developments now benefit from faster decisions by expert planning officers with streamlined biodiversity net gain requirements," Baroness Taylor said.

She outlined additional measures, including £48 million to support recruitment and training of planners, selling more of Homes England's land in small-only sales, and a £700 million extension to the Home Building Fund.

In a notable show of cross-party consensus, Sir James Cleverly MP, Shadow Secretary of State for Housing, Communities and Local Government, pledged Conservative support for ambitious reforms.

The Government has committed to building 1.5 million new homes by the end of this parliamentary term, with both ministers and shadow ministers emphasising the vital role small and medium-sized building companies must play in achieving this target.