Good News for SME Housebuilding Companies

Good News for SME Housebuilding Companies

09th April 2019

Sadiq Khan, the Mayor of London, has called for small to medium housebuilding companies to bot to build nearly a hundred new homes that are being planned across London.  These homes will comprise part of the Mayor’s “small sites programme”, with the target of providing 50% affordable housing across the portfolio of sites to be used on the latest group of Transport for London sites in Bexley, Ealing, Hounslow, Lambeth, Newham, Richmond and Waltham Forest.

This is a great opportunity for any SME housebuilding business owners who want to increase their business for the future.  This has come about following Khan’s assertion that London’s housebuilding sector was “dominated by a small number of larger developers that build the vast majority of homes across the capital”. 

The Mayor is determined to ensure that small plots of publicly owned land are accessible to small and medium sized building firms (those which build fewer than a hundred homes annually) and he has put in place what his office calls a “simple bidding process with standardised contracts”. 

Transport for London (TfL) initiated ten small sites in seven of London’s boroughs as a pilot programme back in February 2018.  They received 134 bids from 80 companies to build homes on the land earmarked for this development. 

According to the Deputy Mayor for Housing and Residential Development, James Murray, this small sites initiative has been immensely popular with small to medium sized house builders and community led housing groups alike.  With London being overly reliant on large developers for such a small time, making sure that smaller building companies can play their part in building a London fit for the 21st Century is vital for the capital and for the broader London economy.

Public landowners have limited resources when it comes to work on smaller sites which are often sold at auction which results in little control over the speed of development and the quality of the housing.  These small sites are ideal for development by smaller building companies, but there are often challenges relating to finance, access to available land, planning certainty and public procurement.   Small Sites London aims to change this by providing a service which combines some of the convenience of land auctions with some of the delivery and quality control of a development agreement, all without the requirement for procurement. 

This should enable landowners in London to select smaller building companies which are capable of constructing the high-quality homes with innovative solutions for complex sites.  When a public landowner uses this service, Small Sites London will commission a full set of surveys to help reduce development risks.

All of the small sites will be marketed with fully transparent and standardised contract terms and, in cases where surveys have revealed constraints, landowners may be helped with funding to unlock the sites that would otherwise not be viable.