As Wales approaches the Senedd election on 7 May, the Federation of Master Builders (FMB) Cymru is urging all political parties to prioritise meaningful reform of the housing delivery system, warning that without stronger support for small and medium-sized (SME) housebuilders, Wales will continue to fall short of the homes it urgently needs.
Access to housing has become one of the most pressing challenges facing communities across Wales. With wages failing to keep pace with house prices, homeownership is increasingly out of reach for many working households. Latest Welsh Government estimates show that Wales requires approximately 8,700 new homes every year to meet demand. However, over the past five years, delivery has averaged only around 5,000 homes annually, creating a persistent and growing shortfall.
Around 75% of new homes in Wales are built by the private sector. However, the market has become increasingly dominated by a small number of very large developers operating across England and Wales. These firms understandably prioritise sites that maximise financial returns, meaning less commercially attractive, but locally important sites, are often overlooked.
Meanwhile, SME housebuilders, once responsible for around 40% of new homes in the late 1980s, now deliver just 10%. FMB Cymru says reversing this decline is essential if Wales is to address its housing crisis.
The collapse in SME delivery has been largely driven by a planning system that has become excessively risky, unpredictable and costly. The complexity and financial exposure involved in securing planning permission means that only firms with substantial reserves can consistently operate in the current market.
Ifan Glyn, FMB Cymru Director, 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’s 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.The next Welsh Government must commit to creating the conditions that allow SMEs to thrive. That is the only way we will significantly increase supply, reduce waiting lists, and restore access to homeownership and affordable housing.”
Mark Roberts 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.”
FMB Cymru is calling on the next Welsh Government to:
- Set ambitious national housing targets across all tenures, exceeding calculated annual need in order to address the existing backlog (unmet need currently sits at 9,400 homes) quickly, rather than locking it in for decades.
- Mandate, monitor and enforce the allocation of small sites in Development Plans, ensuring meaningful opportunities for SME builders to participate in housing delivery.
- Raise the threshold for “major developments” to 50 units, reducing disproportionate regulatory burdens on smaller builders.
- Improve access to finance for the pre-planning phase of house building, encouraging new entrants, supporting innovation, and enabling SMEs to bring forward sites with greater confidence.
FMB Cymru is calling on all political parties to set out how they will support a more balanced housing market that empowers local builders and deliver the homes Wales urgently needs.
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