Why are SME builders waving goodbye to housebuilding?

posted by 3 weeks ago in News
Why are SME builders waving goodbye to housebuilding?

Although within the construction industry things are on the up and the feeling of optimism is growing, smaller builders are waving goodbye to the housebuilding market and leaving it to the big players.

After a tough winter, and the construction industry losing one of its biggest suppliers and the dragged out ‘Beast from the East’ storm which meant many workers lost out on many days’ worth of work, the housebuilding market fell by 14% as well as an increase in price for materials.

According to research, 56% of SME building firms believe they will see growth in their workloads over the next six months, this is double the amount compared to the same period in 2016 and a jump up of 12% points on quarter 4 2017.

The fall of Carillion has fortunately, not followed through to the construction industry’s ‘bedrock.’ In fact, of those who took part in the research, 84% of construction firms depend on their work from private householders and local enterprises, which implies another boost for UK consumer confidence.

The predicted growth will be mostly placed amongst the smaller firms within the small residential category due to the lack of SMEs interested in the housebuilding and public sector as work prospects. Two thirds of SME building firms have admitted that they do have an eagerness to enter the bigger projects, only 10% have said that they will actually attempt it.

Managing Director of AXA Insurance UK plc, Gareth Howell comments;

“The UK is 100,000 houses per year down on its target for new affordable homes. The biggest public-sector contractor has just crashed, leaving this field open to newcomers. There have been suggestions that small firms will ride to the rescue on both fronts, but they have been out in the cold for way too long. In the case of housebuilding, 30 years or more. Small firms have learnt to live without such projects, but can infrastructure live without them?”

Managing Director of Businesscomparison.com, Philip Brennan also comments;

“The development industry has seen massive growth over the last few years, and it is important to the economy that this is sustained with factors such as the harsh winters, Brexit and the interest rate movement hampering this growth. However, the positives of the Carillion failure is that hopefully this will give smaller businesses the opportunity to shine. Especially with the government tendering process now helping to give contractors a fairer playing field. Also, the increase competition in the alternative finance sector should give developers the opportunity to go and pursue their own developments. Here is to a good 2018 and developers will soon be basking in the sun.”