Reforms to the UK planning system announced by the Government represent a major boost to the nation's micro and SME house builders.
Streamlined planning for small sites, relaxed biodiversity rules, and a new pilot scheme to unlock land access are welcome changes, however there is still more work to be done to fully revitalise small builders’ role in housing delivery.
Jeremy Gray, Head of External Affairs at the Federation of Master Builders (FMB) said: "This is a big change for the planning system and one that acknowledges the hardships faced by SME house builders over the last few decades, which have resulted in their decline.
“The UK’s small house builders stand ready to deliver the homes Britain needs, but the planning system has stifled their growth. The FMB has long called for reform to the planning system to support SMEs, and so the decision to streamline requirements on sites of up to nine homes, alongside faster decision making is a positive step. The medium site designation will also be welcomed as it reduces planning hurdles, enabling small house builders to scale up their businesses.
“However, the small site allocation in local plans will need revisiting to fully realise the potential of small house builders. Local planning authorities will also require further investment to ensure that the system has capacity. We know from the FMB’s 2024 Housebuilders’ Survey that communication with planning officers is a major hindrance to building new homes. We look forward to working with Government on these proposals to ensure that the nation's micro and SME house builders can thrive.”
The changes are in support of the Government's Plan for Change target of delivering 1.5 million homes and expanding homeownership opportunities across the UK.
Neil Jefferson, Chief Executive at the Home Builders Federation, said: “Measures to support SME builders are very welcome and crucial to the industry’s ability to deliver. Over recent decades, the increasingly complex and challenging operating environment has resulted in a dramatic fall in the number of SME house builders."
"Smaller builders play a crucial role and, if the policy environment allows, can make a major contribution towards the ambitious housing targets set by ministers. However, whilst these changes are welcome, unless the Government addresses the more significant barriers to delivery, housing supply will remain suppressed."
"The lack of government support for buyers amidst a dearth of affordable mortgage lending, and housing associations' inability to take on the affordable housing developers provide, continues to prevent house builders of all sizes from accelerating output."
Richard Beresford, Chief Executive of the National Federation of Builders (NFB), said: “I am immensely proud of our housebuilding members and staff for never giving up on their campaign for a ‘Medium’ sized site definition of between ten and 49 homes.
“After we helped write the National Planning Policy Framework (NPPF), the next logical step was a ‘Medium’ sized definition to sit between Minor, fewer than 10 homes, and Major, ten and above. We never expected it to take seven years of lobbying but are delighted that in less than twelve months, the Labour government understood that they could not help SMEs unless planning recognised their typical site size.
“Labour should be commended for understanding the benefits of this proposal, particularly after the Conservative government talked up their desire to help SMEs but did little to recognise their existence.”
“In their press release, the Government highlighted that the current system is far too difficult for smaller builders to get spades in the ground, with small sites of 10 homes jumping through the same planning hurdles as one with 100 or more.
“They also recognised that smaller firms, ‘which provide local jobs and train eight out of 10 construction apprentices, have seen their market share shrink since the 1980s, when SME builders delivered 40% of the country’s homes’.”
Rico Wojtulewicz, Head of Policy and Market Insight at the NFB and House Builders Association (HBA), said planning reform isn’t just about permissions, it is about policy proportionality.
“A ‘Medium’ sized site helps rid us of the antiquated, SME damaging, Minor and Major site size definitions and creates an environment where the Government can help SMEs in practice,” he added.
“It is also fantastic to see ‘Minor’ site reforms, land unlocking strategies and greater appreciation of AI and digital tool opportunities. The announced proposals should also ensure finance is also easier to access because whether private or government backed money, all of it still requires full planning to be drawn down.”
