SME housebuilders key to restoring homeownership confidence, says FMB

By Danny BallPublished On: August 4th, 2026Categories: News, Top Stories

The Federation of Master Builders (FMB) has warned that the continued decline of SME housebuilders is restricting housing delivery across the UK after new research found more than half of aspiring first-time buyers believe they will never own a home.

Responding to the latest HomeOwners Alliance HomeOwner Survey, the FMB said the findings underline the need for planning reform and greater support for smaller construction firms if the industry is to increase housing supply and improve affordability.

The survey found that 73% of non-homeowners still aspire to own a home, but 52% now doubt they will ever get onto the property ladder.

Planning barriers continue to restrict SME housebuilders

The FMB said the UK’s housing challenge is not simply about demand, but the industry’s ability to build enough homes in the right locations.

It argued that SME housebuilders, which historically delivered a far greater proportion of the country’s new homes, continue to face significant barriers including planning delays, regulatory burdens and a shortage of viable small development sites.

Brian Berry, Chief Executive of the FMB, said: “It’s deeply worrying that so many people have simply given up hope of ever owning their own home.

It is, however, not surprising when you look at how few homes are actually being built, and by whom. Small and medium-sized building companies used to deliver a much greater share of new homes in this country than they do today, instead they are squeezed out by a planning system that favours the big volume housebuilders and works against smaller firms building on smaller sites.

“If we want to restore people’s confidence that homeownership is achievable, we need to get more small building companies building again and get more suitable homes for the right people, in the right places. Fixing the mortgage confusion highlighted in this survey matters too – but it won’t count for much if there still aren’t enough homes for people to buy.”

Housing delivery remains central to improving affordability

Alongside concerns over housing supply, the survey identified widespread misconceptions about mortgage lending that could be discouraging prospective buyers from entering the market.

It found that 62% of respondents incorrectly believed they required a deposit of at least 10%, while almost half thought mortgage borrowing was always limited to four or five times their annual salary.

One in four also believed they could not begin exploring mortgage options until they had identified a property.

Paula Higgins, Chief Executive of the HomeOwners Alliance, said: “It is deeply concerning that more than half of aspiring homeowners believe they will never get onto the ladder.

“Some of that comes down to outdated assumptions about deposits and borrowing that are ruling people out before they’ve even started, and we’d urge anyone in that position to get proper, independent guidance before writing themselves off.

“But the FMB is right that better information can only go so far. If there aren’t enough of the right homes being built, particularly by the small and medium-sized builders who understand and love their local areas, then confidence will keep draining away no matter how well people understand their mortgage options.”

The FMB said tackling mortgage misconceptions may help prospective buyers, but stressed that restoring confidence in homeownership will ultimately depend on increasing housing delivery. The federation argues that unlocking more opportunities for SME builders through planning reform and a stronger pipeline of small development sites will be critical if the Government is to meet its housebuilding ambitions and address the UK’s long-term housing shortage.