LendInvest calls for government support for property SMEs

LendInvest, the online mortgage lender, is calling on the Government to revise its treatment of small and medium-sized property investment and development companies, and recognise the positive contribution they can make to resolving the UK’s deep-rooted housing crisis.

Related topics:  Commercial,  Commercial finance
Amy Loddington
6th March 2017
house of commons london

In a new report entitled Starting Small To Build More Homes: a blueprint for better policymaking for property SME market LendInvest brings together industry evidence for the first time to examine the root cause - and subsequent impact - of challenges faced by property SMEs such as constrained access to finance and distorted policy around regulation, taxation and access to land.

KIey findings in the report included that four in five housebuilders have gone out of business since the last housing boom - and that before 1990, small housebuilders were responsible for 3 in 8 of the UK's new homes, which has dropped to 1 in 8 today.

The report also illustrates the social and economic contributions that property investment and development SMEs make locally and nationally, and makes recommendations to end a protracted preference by government for muted support of this industry sector.

Recommendations in the report include that state-backed finance bodies - such as the British Business Bank or Homes & Communities Agency - could be mandated to begin or accelerate the provision of funding for property SMEs; that a quota of public land coujold be apportioned for sale only to SMEs; and that tax burdens could be simplified to help SMEs reinvest capital into business development.

Christian Faes, Co-Founder & CEO of LendInvest, comments:

“80% of small-scale developers have gone out of business since the last housebuilding boom. That’s an appalling statistic. It’s meant less employment, less entrepreneurialism and fewer new homes on British streets where large-scale housebuilders didn’t pick up the slack.

“Decades of successive governments’ under-investment and muted decisions, coupled with a planning system that defaults to favouring larger sites over small ones has cumulatively left UK housing in a dire situation. The Housing White Paper showed us there are no quick fixes, but incremental improvements can and must be made.

“If we’re going to encourage people to forge careers in property, they need to know that their businesses will be treated the same as start-ups and scale-ups in other productive sectors. Failing that, we risk losing another generation of property entrepreneurs. That mustn’t happen. It’s time to mix small-scale housebuilders into the debate and give them the chance to help get Britain building.”

John Slaughter, director of external affairs at the Homes Builders Federation that supports the report, says:

“Housing supply has increased 52% in the last three years, but the majority of that has come from larger companies and we need to implement measures that can help get SMEs building more too if we are to fully address our national housing requirements. We welcome the LendInvest report’s contribution to the debate on how we do that.”

And Marc Vlessing, CEO of Pocket Living, the property SME, adds:

“It is no coincidence that as the number of SME developers has declined so too has the number of homes built. A renaissance of SME firms like Pocket utilising modern methods of construction on smaller, often overlooked, land plots will be crucial to helping solve our housing crisis.

“The Government has laid the foundations for this renaissance through the Home Builders’ Fund but we still have some way to go. Simplifying the tax system, ring-fencing some public sector land for SMEs and making it simpler for them to access capital would all help to unleash the potential of the SME builder.”

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