Changes made by the House of Lords would target small development sites for expensive affordable housing contributions, while increasing regulations and taxes on small builders.
Brian Berry, Chief Executive of the FMB, said the organisation understands the need for more "affordable" homes in rural areas, but making changes to affect small scale housing developments would be 'counterproductive'.
"Up until relatively recently, including under a Labour Government, we had a national threshold for affordable housing requirements set at 15 units. This was part of a longstanding recognition that it is not appropriate to place the same demands on the smallest sites and the smallest firms, as it is on major developments and multi-national companies," he said.
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"Now we have a situation where the House of Lord's is actually inserting into legislation that small sites should be treated the same as large sites, almost as if it were a matter of principle. We've seen a long-term decline in the number and output of small and medium-sized (SME) house builders, a trend which has accelerated during the downturn and has almost certainly reduced the overall capacity of the industry, and in turn reduced our ability to build our way out of the housing crisis.
"There’s little doubt that the historically unprecedented demands now being placed on small developers are a major barrier to this."
Mr Berry added the amendments show a "reckless lack of realism and concern" for their consequences.
"The disinterring of a zero carbon standard flies in the face of the fact that further carbon reduction on site will be difficult-to-impossible to achieve, so will likely amount to no more than a tax to enable off-site carbon mitigation," he said.
"Heaping ever-more taxes and heavy-handed regulations on small local builders will worsen the housing crisis."
(LM)
