Over-reliance on major developers is stifling housing supply in Wales, FMB warns

Around three-quarters of these new homes are built by the private sector, which is increasingly dominated by a small number of large developers across England and Wales.

The FMB argues that these firms prioritise sites that maximise revenue, leaving smaller, locally important sites “overlooked”.

In the 1980s, SME builders were responsible for four in 10 new homes. Today, that has fallen to just over 10%. The FMB says the decline has been driven by increasingly complex and costly planning requirements, which have created a market only accessible to firms with deep pockets.

The federation is urging the next Welsh government to set “ambitious new national housing targets across all tenures”, exceeding the current target of 8,400 to address the unmet need of 9,400 homes.

It also recommends mandating, monitoring and enforcing the allocation of small sites in development plans for SMEs, raising the threshold for “major developments” to 50 units, improving access to pre-planning funding, encouraging new entrants, and supporting innovation to give smaller builders greater confidence.

Ifan Glyn, Wales director at the FMB, said: “If we continue to rely on a small number of large firms to deliver the vast majority of our homes, we will never build at the scale and pace required to meet Wales’ housing need.

“SME builders are rooted in their communities, deliver smaller sites that large developers often overlook, and can help create a more diverse and resilient housing market.

“However, the current planning system is stacked against them. Without reform to reduce risk, SME builders simply cannot play the role Wales needs them to play.”

Mark Roberts, director of Pembrokeshire-based Roberts Construction and chair of the FMB West Wales branch, said: “I’ve been building homes in Pembrokeshire for years, but I’ve had to step back from new builds because the opportunities just aren’t there anymore.

“Smaller sites that local builders like me would typically take on are becoming harder to access, and the planning process is too uncertain and costly to take the risk.

“It’s frustrating because there is demand locally, and we want to be part of the solution, but the system isn’t set up for small builders. Without change, more of us will be pushed out, and that’s not good for our communities or for housing supply.”