4 in 5 British housebuilders have gone out of business in the last 30 years

Mews houses in Notting Hill, LondonShutterstockMews houses in Notting Hill, London

LONDON — Four in five of Britain’s housebuilders have gone out of business in the last 30 years, according to new research.

A report by LendInvest, an online property marketplace, found that in 1988 — when Britain’s last housebuilding boom stalled — the number of smaller UK housebuilders stood at 12,200.

That figure fell to 5,700 by 2006, and to 2,400 by 2014.

It says that, by driving that figure back over 5,000, Britain could build 25,000 more homes every year. Currently, just over 140,000 are built every year.

So what’s the problem with the industry? A recent House of Lords report found that Britain’s eight largest builders build more than 50% of houses, which makes it very difficult for smaller builders to operate.

LendInvest’s report says that the lack of competition has contributed to the UK’s huge shortage of housing stock.

In turn, that shortage has been largely responsible for pushing prices up to their current levels — to the point that the average UK home currently costs over 6.5 times an annual salary.

LendInvest’s report says that the government could help to resolve the country’s chronic housing shortage by rebooting its strategy to help smaller firms property firms.

That would involve apportioning a quota of land only available for sale to small and medium businesses (SMEs), simplifying tax burdens, boosting state-backed funding for SMEs, and launching a fresh government strategy to boost competition among housebuilders.

LendInvest CEO Christian Faes said: “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, muted decisions and biased preference for large-scale development have 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.”

He added: “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.”

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