Consumer demand for new build homes at lowest level since 2013

Consumer demand for new build homes has dropped to a six-year low, according to the Federation of Master Builders (FMB).

The organisation's House Builders' Survey reveals that small house builders reporting buyer demand at a score of 2.9 out of five, down from 3.14 last year and expected to fall to 2.75 in 2020.

Almost half of the house builders surveyed attribute the fall in consumer demand for new homes down to a lack of confidence.

Access to land remains the top barrier for 43% of small and medium-sized house builders, down from 59% in 2018.

The planning system comes in as the second major barrier, with 42% of firms citing this issue, down from 51% last year.

Access to finance is a barrier for 39% of builders, the lowest proportion recorded in eight years, while 26% reported a shortage of skilled workers, down from 44% in 2018.

"Many prospective homeowners are clearly holding off buying until there is more political and economic certainty," says Brian Berry, chief executive of the FMB.

"Hopefully this is just a short-term pause, and that post-Brexit, demand will pick up once again. If not, and we enter a downturn period, the government will need to consider how best to support SME house builders to avoid firms leaving the sector."

"This is the fifth consecutive year that small house builders have cited lack of access to available and viable land as the number one barrier," adds Berry.

He says local authorities' plans remain too focused on large sites.

"The increases in planning fees by 20% in January 2018 were supposed to lead to increased speed and delivery of planning services, but only 3% of our members have seen any improvement since the rise," Berry explains.

"In fact, 38% of small builders have seen the performance of planning departments worsen."

He says builders are now paying for an inferior service which 'needs to be addressed urgently'.

Last week, the government revealed that the number of new homes built has increased, with 45,190 completions in the three months to the end of June, up 11% on the same period in 2018.

Meanwhile, there were 173,660 completions in the year to June, an 8% annual rise and the highest number recorded for 11 years.

However, the number of new developments started were down 8% in the three months to June (37,220) and down 1% on an annual basis (160,640).