Small and medium-sized housebuilders could soon play a far greater role in tackling the UK’s housing shortage after the government announced a series of reforms designed to remove long-standing barriers that have disadvantaged SME builders and property developers for decades. The new measures promise simpler planning processes, greater access to land and financial support and form part of the government’s wider Plan for Change, which targets the delivery of 1.5 million homes and the creation of jobs in the sector.
SME builders once delivered around 40 per cent of the UK’s new housing stock in the 1980s – a figure that has since declined significantly. Yet their importance to the sector remains clear, with smaller firms responsible for training around 80 per cent of all construction apprentices. The government’s latest proposals aim to reverse this long-term decline.
A key focus of the package will be streamlining the planning process for developments with fewer than 50 homes. Small sites of up to nine properties will benefit from faster, officer-led planning decisions, rather than relying on planning committee decisions; exemption from the Building Safety Levy and simplified biodiversity rules. A new ‘medium site’ category covering developments of 10–49 homes will also face reduced regulation with a proposed exemption from the Building Safety Levy and simplified BNG rules.
Furthermore, a new initiative called the Small Sites Aggregator will trial a model to package together small brownfield plots for SME development. Pilots will launch in Bristol, Sheffield and Lewisham, with the goal of creating social rent homes and addressing temporary accommodation needs. The pilot is based on an approach developed under Lloyds Banking Group’s Social Housing Initiative.
Additional support announced for local buildings includes:
- Homes England releasing more land exclusively for SMEs
- New funding through a £100m SME Accelerator Loan scheme
- £10m for councils to hire planning and environmental specialists
- A £1.2m PropTech Innovation Fund to support digital solutions in small site delivery
Deputy Prime Minister and Housing Secretary Angela 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.”
Industry bodies and housebuilders have welcomed the proposals. Paul Rickard, CEO of Pocket Living, said the announcements show the government recognises the role of SMEs and is taking steps to “level the playing field.”
Richard Beresford, Chief Executive of the National Federation of Builders, added: “This is the strategic step that SMEs desperately needed, and we thank the government for working with and listening to industry.”
Further consultations will explore planning thresholds and how biodiversity targets apply to small and medium developments. Full details are expected later this year.
