The government has announced a major policy shift to support small and medium-sized housebuilders in a bid to unlock thousands of new homes and rejuvenate a sector long constrained by regulation and finance barriers.
In reforms unveiled yesterday by Deputy Prime Minister and Housing Secretary Angela Rayner, SMEs will benefit from streamlined planning processes, targeted financial support, and new access to land, as part of a wider effort to deliver 1.5 million homes by the end of the Parliament.
The reforms are designed to tackle what ministers describe as a “decades-long decline” in SME builder activity.
In the 1980s, smaller firms accounted for 40% of all homes built in England. That figure has since plummeted, amid complex planning rules, high upfront costs and limited access to land.
PIPELINE OF NEW TALENT
The construction industry, which trains around 80% of apprentices through SMEs, is expected to benefit from a pipeline of new talent. Up to 120,000 new apprenticeships, including in construction, are part of the government’s wider Plan for Change.
Speaking from Westminster, Rayner said: “Smaller housebuilders must be the bedrock of our Plan for Change to build 1.5 million homes and fix the housing crisis we’ve inherited – and get working people on the housing ladder.
“For decades the status quo has failed them, and it’s time to level the playing field.”
The package includes:
Streamlined Planning for Small Sites: Developments of up to nine homes will now bypass full planning committees and receive faster decisions from expert officers. Biodiversity requirements will also be simplified.
New ‘Medium Site’ Category: Sites of 10 to 49 homes will benefit from reduced regulatory burdens, including exemption from the Building Safety Levy and simplified rules on biodiversity net gain (BNG).
Access to Land and Finance: Homes England will release more publicly owned land exclusively for SMEs, while a new National Housing Delivery Fund, to be detailed in the next spending review, will provide long-term finance solutions including revolving credit facilities.
Small Sites Aggregator Pilot: Trial schemes in Bristol, Sheffield and Lewisham will focus on unlocking fragmented brownfield sites for development by SMEs, based on a model co-developed with Lloyds Banking Group’s Social Housing Initiative.
WELCOME NEWS
Charlie Nunn, Chief Executive of Lloyds Banking Group, said: “This exciting partnership between the public and private sectors will increase investment at pace into the new, genuinely affordable homes that are needed across the UK.”
And Neal Moy, Paragon Bank Development Finance Managing Director, added: “Whilst the devil will be in the detail, this is a positive step and will be welcomed by SME developers that find themselves caught up in a highly bureaucratic and under-resourced planning system that favours larger developers.
“Planning has been the number one barrier identified by SME developers for years, preventing them from getting spades in the ground, with costs and time soaring, so action needs to happen sooner than later to ensure they can accelerate housing delivery.
DROP IN THE OCEAN
“Last year, Paragon Bank surpassed £3 billion of lending since 2018, which has supported the development of around 13,000 new homes. That shows what’s possible when funding and planning are aligned, but it’s a drop in the ocean of what we know could be achieved with sensible and pragmatic legislative reform.”
CHALLENGING AMBITION
Nathan Emerson, Chief Executive of Propertymark, says: “Keeping pace with housing demand remains an incredibly challenging ambition to achieve.
“It is important to review the entire homebuilding process from top to bottom to help ensure the process identifies areas of potential housing need and delivers a streamlined process that supports the provision of sustainable housing.
“We currently have the Planning and Infrastructure Bill working its way through Westminster; however, this still has some distance to go before it becomes law.”
BIGGER PICTURE
And he adds: “Ultimately, we need a process that considers the wider picture, and it is important to factor in the creation of a workforce that brings the required skillsets to construct much needed new homes. It is also crucial to establish a materials supply chain that brings efficiency and consumer value.
“From planning to completion, each aspect of the process must work in harmony via sector wide collaboration, as the challenge is not just about the physical laying of bricks.
“There needs to be a system that has a true focus on supporting and inspiring housing developers of all scales to deliver new housing stock at an enhanced pace, however there must be equally robust backing for all others involved in the delivery process of new homes also.”
