The Federation of Master Builders (FMB) has launched its 2025 Small Housebuilders’ Survey, letting Small- and Medium Enterprise (SME) builders voice their views
The survey shows that small UK housebuilders remain resilient despite the myriad challenges facing the construction sector.
169 housebuilders responded to the survey which was conducted at the FMB’s Winter Parliamentary Reception.
Will 2026 be the year of high demand?
Of those surveyed, 73% of small UK housebuilders stated that they anticipate an increase in buyer demand in the new year, while 69% plan to increase their workforce and 68% feel that recent government reforms will diversify the market, aiding SME developers.
The survey also showed that the barriers facing small UK builders are still damaging what confidence there is. Two-thirds of respondents stated that they were unable to pursue developments on sites due to Section 106 costs, and more than a third have said that the process for obtaining planning permission is getting worse.
Brian Berry, chief executive of the FMB, said: “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.”
Baroness Taylor of Stevenage, parliamentary under secretary of state for housing and local government, said: “We’ve simplified planning for sites under 9 homes. Such developments now benefit from faster decisions by expert planning officers with streamlined biodiversity net gain requirements.
“We recognise the challenges you face. Planning delays, regulatory burdens, a lack of suitable sites and access to finance you need to grow and invest, these have hindered SME builders to do what you do best.”
Concerns that frameworks are locking out SMEs
Writing for PBC Today in November, Tim Barrett, the chair of the Construction Alliance North East, discussed why SME contractors are struggling to win places on construction frameworks compared to large construction businesses.
Tim wrote: “Construction frameworks were meant to level the playing field by streamlining public procurement, cutting red tape and improving value. In reality, many small and medium-sized enterprises (SMEs) are finding it harder than ever to access them.
“Across local authorities, NHS trusts, universities and infrastructure bodies, frameworks have become the default procurement route. As they have grown in size and complexity, the barriers to entry have increased, too. The result, many argue, is a system that increasingly favours the largest contractors, undermining local economic growth and supply chain diversity.”
He continued: “Even when SMEs do win a place, many struggle to secure projects. Frameworks typically award jobs through mini competitions among approved suppliers, with clients often gravitating toward familiar Tier 1 names. This phenomenon, known as framework shelfware, leaves smaller firms frustrated. They invest time and money securing a place yet see little or no return.
“Frameworks are increasingly structured for large organisations. Requirements around national delivery, ESG reporting, digital maturity and cybersecurity are easier for major contractors to meet. At the same time, the value and scope of frameworks have ballooned. What was once a £20 million local framework may now be a £500 million regional one, automatically excluding SMEs. Designed for efficiency, they often consolidate work among a few big players while relegating smaller firms to subcontracting roles.”
The post Small UK housebuilders confident despite challenges, say FMB appeared first on Planning, Building & Construction Today.
