UK House Price Inflation Linked To Lack Of SME Builders

House price inflations across the UK could be linked to a lack of workers within the industry, according to the House Builders Association (HBA).

Figures from the Office for National Statistics (ONS) revealed prices grew by 7.7% between November 2014/15.

The National Federation of Builders (NFB) and the HBA have often claimed the price increase is linked to a 'chronic housing shortage' currently affecting the UK.

However, it is now suggested a lack of SME house builders could also contribute to inflation.

Rico Wojtulewicz, policy advisor at the HBA, said: "Statistical analysis proves that there is a link between the decreasing participation of SME house builders in the sector and the rise in house prices.


"SME house builders have a unique ability to organically develop local communities and infrastructure."

According to ONS data, in the mid-1990s SME house builders made up two-thirds of the entire sector and the average house price, adjusted for inflation, was approximately £60,000.

However, only one third of the market is now made up of SME house builders and average UK house prices have risen to £140,000.

The HBA believes that greater participation of SME house builders can help develop local communities without putting excessive strain on their local infrastructure.

It added workers would also bring forward more 'affordable' homes to those people who find themselves priced out of the market.

Mr Wojtulewicz added: "The HBA calls on the government to do more in facilitating the participation of SME house builders, by helping them overcome the numerous financial and regulatory obstacles in their path."

(LM/MH)