Skills shortages in the building industry will overtake access to finance as a bigger barrier to building new homes, particularly after the UK leaves the European Union, warn small house builders.

The percentage of small and medium sized (SME) house builders saying that a shortage of skilled workers is a major barrier to their ability to build more new homes has risen to 44%, according to an annual assessment from the Federation of Master Builders (FMB).

This is up from 42% in 2017.

More than half (51%) of SME house builders view the planning system as a major constraint on their ability to grow and ‘inadequate resourcing of planning departments’ was rated as the most significant cause of delay in the planning application process for the third year in a row.

Nearly half of small house builders (46%) say access to finance is a major barrier to their ability to build more new homes.

A lack of available and viable land tops the list as the most commonly cited barrier (59%) to increasing housing delivery.

Almost two-thirds of SME house builders (62%) believe that the number of opportunities for small site development are actually decreasing (up from 54% in 2017).

When asked to look ahead over the next three years, more firms cited skills shortages as a likely barrier to growth than access to finance.

‘Nearly half of builders believe the skills shortage is a major barrier to their ability to build new homes,’ said Brian Berry, chief executive of the FMB.

‘The construction sector is heavily reliant on EU workers with just under one in ten workers in the sector born in the EU. Brexit, coupled with the end of free movement, threatens to further intensify the skills shortages we already face.

‘Given that the UK will leave the EU in less than six months, house builders are understandably concerned that skills shortages could worsen and choke housing delivery.

‘In order to combat this skills crisis, the construction industry needs to encourage more entrants into the industry and develop higher quality qualifications.

‘It is critical therefore that the Government doesn’t pull the rug out from under the sector by introducing an inflexible and unresponsive immigration system.’