Improving access to finance for SME builders can "generate sustainable locally-based growth", according to the Federation of Master Builders (FMB).

The organisation said Labour's Shadow Chancellor, John McDonnell, was right to identify the difficulty SMEs have in accessing finance in his Party Conference speech yesterday, 26 September.

Brian Berry, Chief Executive of the FMB, said improving financial problems for SMEs can help create skilled long-term employment and would "go a long way" to increasing the supply of new homes.

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"Despite some improvements in recent years, too many SME house builders struggle to secure finance on affordable terms," he said.

"If these firms can't borrow, they can't build. McDonnell has spoken about funding investment in infrastructure, and it's vital that housing is not excluded from such plans.

"Businesses are often understandably sceptical of Government intervention, but this is one area where it would almost certainly be welcomed. Mr McDonnell could do worse than to revisit some innovative ideas in this area, such as the Help to Build policy of guarantees on private loans to SME house builders, which were endorsed by the Lyons Review and made it into the last Labour manifesto.

"The idea of well-funded regional development banks could also have a real part to play in an improved financial offer to the SME house building sector."

(LM/CD)