Planning changes announced to benefit SME housebuilders

Changes to the planning system have been proposed to make processes easier for SME housebuilders to bring forward smaller developments.

While smaller firms provide local jobs and train eight in ten construction apprentices, their market share has shrunk considerably since the 1980s. Changes proposed by government aim to reduce the regulatory burden on delivering smaller housing developments – currently, schemes of 10 homes or more are subject to the same planning rules as developments of 100 properties or more.

Government proposals to accelerate the construction of new homes include an easing of Biodiversity Net Gain requirements for the smallest schemes. A new ‘medium site’ category covering developments of 10 to 49 homes will also be established, which will benefit from simplified ecological rules and be exempted from the Building Safety Levy to reduce costs on developers.

Homes England will also release more of its land exclusively to SMEs, while a new National Housing Delivery Fund is to be confirmed at the spending review that will support long-term finance options for housebuilders.

Deputy Prime Minister and Housing Secretary, Angela Rayner said:

“Today [28th May] we’re taking urgent action to make the system simpler, fairer and more cost effective, so smaller housebuilders can play a crucial role in our journey to get Britain building.”

Full details are also being set out for the modernising of planning committees – ensuring elected councillors focus on the most significant proposals and larger developments rather than small-scale projects or niche technical details, while more faster decisions are made by trained planners.  

Further support announced for local builders includes:

• £100 million in SME Accelerator Loans to help smaller firms to grow and invest using part of the £700 million extension to the Home Building Fund announced in December. 
• £10 million for councils to fund more specialists to speed up environmental assessments, getting spades in the ground faster. 
• A £1.2 million PropTech Innovation Fund to support innovation in small site delivery, for example through use of new data tools.