If we want to address the housing crisis we simply need more builders

Chief executive of the Development Bank of Wales Giles Thorley says we need to increase the number of SME housing developers

It can be tempting, when the economic weather turns, to put the hard hat back on the hook. Far easier say to pause developments, shelve regeneration schemes, stick to ‘essential’ repairs only and wait for confidence to return.

But that is not an option for Wales. We cannot afford to hit pause on what is fundamental to our long-term prosperity. We need more and better quality homes for people to live in. We still need town centres and public buildings that embrace and enhance the community and feel like assets. And we still need the energy and infrastructure that makes new investment possible.

That’s why I’m increasingly convinced that the next chapter for Wales will be written in bricks, mortar and connectivity.

Across the UK, recent data has shown construction activity can cool quickly when sentiment weakens, particularly in private housing and commercial building, where investors, developers and lenders become more cautious.

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Yet the underlying need does not change. Housing shortages don’t disappear. Regeneration doesn’t become optional. Businesses don’t stop needing modern, energy-efficient premises. Public services don’t stop needing upgrades.

When such projects stall, the impact ripples far beyond the construction site. Construction supports an extensive supply chain, from local subcontractors to architects to manufacturers and logistics firms. It remains one of the economy’s most important drivers.

This is why synchronised investment matters and short-term fixes won’t do. Proper coordination across housing, property and energy is needed – and it must be aligned to achieve long-term outcomes.

Wales has been a pioneer in developing a long-term, strategic policy framework. The principles of that framework put communities, identity and long-term value creation at the heart of development. The Well-being of Future Generations (Wales) Act sets a global benchmark for sustainable decision-making. It directs not just what we build, but why we build it, who benefits, and what legacy it leaves.

However, this framework can only deliver when projects on the ground are also commercially viable and being delivered. That often requires public and private partners to pull in the same direction.

That is because of a stark reality: neither public finance nor private finance can deliver the scale of transformation Wales needs on its own. Public capital brings stability, strategic intent and patience. Private capital brings discipline, innovation and the ability to scale. Together, they can complement each other and make a real difference.

Why SMEs matter?

Wales faces a persistent housing supply challenge. Developers are contending with rising costs, labour shortages, land availability planning constraints and, economic uncertainty. It is no wonder completions fall short of demand.

But there’s an underlying challenge here too: the disappearance of SME housebuilders. In the late 1980s, SMEs delivered around 40% of new homes in Wales. Today, that figure has fallen to just 9%.

The large national housebuilders are essential for volume, but an over-reliance on a small number of large players comes with risks. This concentration tends to reduce flexibility, narrow the pipeline of sites, and make delivery more vulnerable to shifts in the appetite of these large players.

Smaller, locally rooted builders play a different role. They are small companies, who employ local subcontractors and operate based on local demand. They also deliver projects that make sense size-wise in Wales: from two-home infill schemes to 60-plus home developments.

After the financial crash, smaller residential builders experienced an almost complete removal of funding options, creating a major constraint on housing delivery.

At that point, we built a commercial case that Wales needed a dedicated approach and over the past decade £300m of targeted property finance has underpinned 2,400 new homes and more than 245,000 sq ft of much needed commercial space.

The lesson is clear: if Wales wants more homes, it needs more builders. They, in turn, need access to the right kind of capital, at the right point in the cycle. I also believe there is a greater good here. Property investment is often framed as a balance sheet issue. I believe it is a wellbeing and an economic issue. Good social infrastructure can reduce poverty, improve health and support educational attainment; modern commercial space helps firms grow, recruit and retain talent. Mixed-use schemes can become catalysts for long-term community wealth creation, keeping spending power circulating locally.

We’re already seeing demand rise. Our property investment grew by 27% last year, a signal, not just of appetite, but of need. Projects like Parc Eirin in Rhondda Cynon Taf and innovative eco-developments such as Maes y Teirw in Carmarthenshire show what’s possible when funding accelerates delivery and helps raise standards.

And those schemes also underline something else: delivery depends on partnership. Developers, lenders, local authorities and government all have a role. Without joined-up action, sites remain locked, costs rise, and viable projects become unviable.Wales doesn’t lack ambition. It doesn’t lack policy frameworks. It doesn’t even lack opportunity.

What we need now is more delivery, at greater scale, upping the pace, grounded in place, backed by partnership, and financed in a way that supports long-term prosperity.

Because building Wales’ future isn’t a slogan but a practical programme of work. And the best time to get on with it is now.