SME housebuilders could start building significantly more new homes in England and Wales if barriers to growth were cut, according to the Home Builders Federation (HBF).

A new report from the trade body says that red tape is stifling housebuilders, preventing them from developing substantially more new residential properties. 

Stewart Baseley, executive chairman of the HBF, said: “Whilst housing output has increased significantly in recent years, the vast majority of the increases have come from larger companies. The number of smaller builders has collapsed over recent decades with few new entrants to the market able to grow to any size.”

The report makes various recommendations on ways that housebuilding levels could be increased, with a view to reducing the ever growing supply-demand imbalance in the market. 

The recommendations include tacking specific planning problems, the creation of a new Help to Build scheme to help extend sustainable lending to smaller companies, lifting barriers for builders to access tax incentives, provide technical and planning advice services for fledgling businesses, and seize the opportunity of Brexit to reform EU regulation reducing the risk and complexity associated with building new homes.

By implanting these changes, the HBF believe that SME builders could easily produce an additional 25,000 homes a year.

Baseley added: “If government wants to see continued increases in supply it is imperative it enables SME builders to play their part.

“Removing the barriers for SME builders could result in tens of thousands of desperately needed additional homes being built and boost economies up and down the country.”