SME Strategies were approached by the Birmingham Business Post who had come across the financial director and business direction services we provide to our clients.
Seeing our specialism in construction amongst other sectors, we were asked to write a guest article on the housing crisis and SMEs. The large housebuilders simply do not have the capacity to meet our housing needs.
Furthermore, recognising how crucial is the SME sector to the UK economy, accounting for half of our GDP, the Business Post especially wants to support SMEs as Brexit moves forward. As we are already seeing, there will be inevitably be changes and some shocks along the way.
The movement in the exchange rate is already affecting both importers and exporters as well as UK share prices. Brexit also offers enormous opportunities to SMEs in the UK and we at SME Strategies will be working with our clients to meet both the challenges and as importantly to exploit those opportunities that lie ahead.
We are delighted to be working with the Business Post and look forward to developing other initiatives with them.
Read our article on the Birmingham Business Post website here: https://www.bbpmedia.co.uk/news/property-construction/can-smes-come-to-the-rescue-of-our-housing-crisis.html
Hi David.
I really enjoyed your post and can add my two pennyworth to the debate.
In the last century, we had three great housebuilding booms in the U.K. The 1950s, the 1960s and the 1930s.
The former two were dominated by council house building and the latter by private house building by small developers. This was the age of the 1930s semi and it was made possible by the absence of the 1947 Town and Country Planning Act so they could basically buy up some cheap farmland and build where they wanted but it tended to be on the edge of established towns. Just look at where the thirties semis are located now.
The houses they built sold for between £350 and £400 and could be secured for an initial deposit of a fiver with another £20 paid a little later.
This development was also made possible by the smaller developers having access to funding in the form of a housing bond.
Could we do this today?
Say the Government set up a Housing Bond that would pay investors a much better return on their cash than if they left it in the building society? They would get less than their return on a BTL property but they’d have none of the hassle and their risk would be zero.
We could then use the proceeds of the bond to lend money to small to medium sized developers to build affordable homes for rent or shared ownership. We could attach various conditions about repayment by the developers and make their directors personally responsible if their companies took the money and ran. We could also attach conditions as to building facilities in larger developments.
The bond money could then be swapped over, post build, to housing associations. Elderly cash rich people could have decent returns without hassle and less of them would distort the buying market by BTL (buy to let) investments.
Really interesting article David.
In the article it’s said that a small developer can be much nimbler than the big house builders. If being nimble can be thought of as being agile then perhaps the SME house builders should adopt Agile Project Management (AgilePM) when developing their properties?
Here are some principles of AgilePM and why I think this might be helpful to you:-
1. Collaboration. As strong collaboration is what is suggested in the article – between builders and the government – this would fit well.
2. The solution is flexible. This might suit the environment where the causes of the housing shortage are complex – so the SME builder could adapt quicker to the root causes and changes in the root causes.
3. Delivery is early (compared to more traditional project management methods). This would suit the SME builders requirements to have a quick turnaround of projects.
The suggestion that the Government should enter into a dialogue with the SME house builder sounds like a great start towards more agile working. There is definitely an opportunity to make a real impact here to help SME house builders build more of the right sort of houses in line with what communities actually want. The great thing going for the smaller house builder is their nimbleness but this needs to be developed into a clear strength. This does though require delivery of ‘joined up thinking’ which is why a form of project management becomes essential.
I would be happy to talk further with you about ways of taking this forward.
Rashad Shamim ACA