Meeting Housing Demand28th January 2022
LDS Sales Guarantees feature in FIBA Advantage Online – MEETING HOUSING DEMAND: New House of Lords Report Highlights Need To Support SME Housebuilders.
Mark Roberts, Relationship Director, LDS Sales Guarantees
“If SME housebuilders were revived to historic levels, brokers could benefit from an estimated £120m of potential additional fees, with additional introduction fees from LDS on top. As key organisations such as the House of Lords increasingly seek to boost SMEs, now is the time for brokers to harness that potential”.
This month, the House of Lords Built Environment Committee published a report, Meeting Housing Demand, outlining findings from an inquiry into the level of demand for new housing in the UK, and how barriers to meeting this demand can be overcome.
As LDS Sales Guarantees champion the SME housebuilder, they were delighted to provide written evidence to the enquiry, plus the Savills report they commissioned, investigating the total available SME housebuilding market and key blockers to the delivery of new homes.
Confirming findings from the LDS/Savills research, the Meeting Housing Demand report identifies that SMEs are key to building more new homes and increasing overall UK housing supply.
Baroness Neville-Rolfe DBE CMG, Chair of the House of Lords Built Environment Committee said of the report: “The Government’s ambitious target of 300,000 new homes per year will only be met if Government takes action to remove the barriers for housebuilders, particularly for SMEs who 35 years ago built 39% of new homes but now build just 10%.”
Both the House of Lords and Savills reports state that SMEs could bring forward tens of thousands of new homes each year under the right conditions. Analysis by former Treasury economist Chris Walker found that Sales Guarantees can reduce the cash requirements for developers by around 77%, enabling SMEs to treble or quadruple their output. This could lead to an additional 55,000 homes a year, unlocking more than £12.9bn in yearly GVA, and supporting nearly 200,000 jobs in the construction industry.
Mark Hawthorn, CEO of LDS commented “It’s great to see that supporting SME housebuilders is a top finding of this report, acknowledging access to finance on viable terms as a key barrier”. Mark goes on to say “Systematic change is now required to allow SMEs to fully grasp this opportunity, reverse over three decades of decline and bring more new housing forward.
“The use of a Sales Guarantee removes pricing and demand risk, therefore opening up access to finance on much improved terms. This, coupled with the ability to utilise our 10% cash deposit, transforms equity requirements often trebling – or even quadrupling – SME housebuilder capacity.”
LDS launched its unique online Sales Guarantee Engine in January 2021, providing brokers, lenders, and SME housebuilders with a tool to instantly generate a bespoke Sales Guarantee. Since then, the engine has produced over £1.9bn of new proposals, many of which have come via savvy development finance and commercial brokers who recognise the opportunity to be at the forefront of championing the SME revival, whilst significantly boosting their fees.
In the past year, they have also launched development finance products that incorporate LDS Sales Guarantees with two lenders, BLEND and Pivot and have more in the pipeline to launch this year. LDS are also currently developing LDS Boost, a new online interactive platform that provides SME housebuilders with a competitive advantage by providing them with key knowledge, access to a broad network of useful contacts and tools to help maximise efficiency and profit.
For more information contact Mark Roberts direct 07590434266.