The Government is proposing reforms across land, regulation and finance that will create simpler rules and faster decision-making to benefit small and medium sized housebuilders, it has said.
‘Complex’ planning rules will be streamlined and ‘onerous’ regulatory burdens eased, the government said, in a bid to build thousands of homes faster on smaller sites across the country. ‘Financial firepower’ will also be provided to SME builders in the form of lending from the Home Building Fund.
The current system places smaller building firms at a disadvantage, the government said, ‘with a small site of 10 homes jumping through the same planning hurdles as one with 100 or more’.
“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.
“Today’s changes will help turn this around, driving up competition across the sector and helping deliver the Plan for Change milestone of 1.5 million homes, so more working families and young people can achieve the dream of homeownership.”
The proposals include a change to the planning process, with ‘faster decisions’ for smaller sites of up to nine homes from ‘expert planning officers’ instead of committees and a new ‘medium site’ category for between 10 and 49 homes, with simpler rules and fewer costs. However, the countryside charity CPRE has warned that bypassing planning committees could result in heritage decisions being made by a single unelected officer and evade the democratic process.
Fergus Charlton, planning partner at Michelmores LLP, agreed the plans could have consequences for local democracy. And, while he acknowledged they would benefit smaller businesses, he warned the simpler rules could lead to developers deliberately under-developing sites.
He commented:
“Only last week at UKREiiF in Leeds small house builders were advocating that they were both lost in the complexity of the planning system and fearful of the combination of speculative planning costs and planning uncertainty. These proposed changes will help those smaller businesses.
“Balancing the costs and benefits of planning decisions is undoubtably tricky as there will be intended impactful consequences on local democracy and to local nature recovery.
“There will also be unintended consequences of setting threshold triggers above which full requirements of the planning system apply, with developers purposefully under-developing sites on the boundaries of these thresholds providing lower housing densities to take advantage of the relaxed rules.”
Further proposals include more land and financing options for SMEs, with Homes England releasing more land exclusively to smaller builders, and a ‘Small Sites Aggregator’ pilot to release brownfield sites that would otherwise go undeveloped.
Financial support for small builders announced by the government includes £100 million in SME Accelerator Loans (part of the £700 million extension to the Home Building Fund administered by Homes England, designed for SME housebuilders in England that struggle to access loans from traditional lenders), £10 million for councils to fund more specialists to speed up environmental assessments, and a £1.2 million PropTech Innovation Fund to support innovation in small site delivery.
Deputy prime minister and housing secretary Angela Rayner said of the proposals:
“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.
“Today 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.”
