Editor's note: This brief was summarised by The Property AI Newsroom from a report by Mortgage Solutions. Read the original article for full details.

SME Builders Need Private Finance for Burnham’s Council Housing Plan

Analysis by specialist lender Together has found that Andy Burnham’s council housebuilding plan may face significant challenges due to shortages of available public land in key locations. The analysis suggests that SME housebuilders and private finance will be essential to delivering the programme.

Andy Burnham has stated that Labour will “oversee the biggest council housebuilding programme since the post-war period” by using vacant land to reduce costs. However, Together’s analysis, using data from property data platform Searchland, found that publicly owned brownfield land in England could accommodate a maximum of 187,000-207,000 homes. This is less than two-thirds of Labour’s previously announced 300,000 social and affordable home programme, and does not account for whether each site is actually deliverable.

The analysis highlights that the state does not own enough registered land to build the programme on public land alone. As a result, at least a third of the homes would need to be built on land purchased at current market value.

The report notes that the available public land consists mainly of small, dispersed brownfield plots, typically suitable for 1-50 homes. These sites are usually developed by SME builders and regional contractors, rather than large volume housebuilders. After planning, access to finance is identified as the biggest constraint for SME housebuilders. The analysis states that mainstream banks have retreated from SME development lending since 2008 and often use rigid criteria that do not account for the complexities of public brownfield land.

Public land is also regionally concentrated. Birmingham, for example, has 185 sites with capacity for around 11,500 homes, while in many areas with the deepest housing shortfalls, there is little or no significant public land available. The analysis found that only five authorities—Birmingham, Bristol, Bradford, Lewisham, and Kirklees—combine a serious housing deficit with a significant public land holding.

For UK letting agents and inventory clerks, the findings suggest that the delivery of new council homes may vary significantly by region, and that SME builders will play a central role in bringing new stock to market, provided they can access suitable finance.