Reversing red tape “faux pas of the past” would help small to medium-sized housebuilders tackle the housing crisis, according to the head of a prominent Liverpool developer.

As a new report studying the barriers affecting  SME builders has been released by the Home Builders Federation (HBF), Redrow founder Steve Morgan says it would have been difficult to grow his company into the same national firm if it had started today.

Redrow is now part of the Liverpool Housing Partnership alongside Liverpool City Council and Liverpool Mutual Homes, working to deliver 1,500 new homes and bring 1,000 properties back into use over five years in the city, and the firm also has a large presence around the wider North West.

In a foreword of the HBF study, Redrow chairman Steve says: “I founded Redrow in 1974 originally as a civil engineering contractor and it was only as a result of the squeeze on public spending of the early 80s that I decided to steer the business in a different direction – home building.

“The transition was easy. Land with outline planning permission was in ready supply and the time to go from a ‘red line’ permission to a start on site was no more than six weeks, often less. There were four or five conditions to clear – colour of bricks, roof tiles, landscaping, etc, then off you went. With bank finance readily available there were few, if any, barriers to entry.”

He adds: “Young entrepreneurs like myself were able to start fledgling home building companies from scratch and build them into national builders – something that would be almost inconceivable today.

“Obtaining planning permission today is a bureaucratic nightmare and beyond the resources of many SME builders; it is a real barrier to entry – even if they can obtain finance.

“In order to solve the housing crisis and build more homes, we need to reverse some of the faux pas of the past.”

According to the HBF report small housebuilders were responsible for four in 10 of the country’s new build homes in 1988, compared to just 12% today.

The barriers faced by SME builders are now said to be “numerous and varied”, with the study highlighting access to finance and increasingly complex planning and regulatory systems as the biggest factors.

The HBF suggests the government could take steps to help SME builders increase their contribution to housing stock, including the creation of a new ‘Help to Build’ scheme to extend sustainable lending to smaller companies, providing technical and planning advice services for fledgling businesses, and lifting barriers for builders to enjoy the tax incentives and support offered to other SMEs.

Other recommendations include seizing the opportunity of Brexit to reform EU regulation reducing the risk and complexity associated with building new homes, and tackling specific planning problems that disproportionately affect the business environment for SMEs such as the lack of smaller sites.

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