The government has announced a series of proposals that it promises will result in faster planning decisions for small sites and provide extra help for SME housebuilders.
As part of the changes, smaller developments of up to nine homes will have Biodiversity Net Gain requirements eased.
The proposals also include a new “medium site” category, where sites between 10 and 49 homes will face simpler rules with fewer costs, including a proposed exemption from the Building Safety Levy as well as simplified BNG rules.
The government said that Homes England will also release more of its land exclusively to SMEs while a new National Housing Delivery Fund, providing new long-term finance options such as revolving credit facilities and lending alliances, will be confirmed at the spending review.
A new pilot scheme, the Small Sites Aggregator, will also be introduced to unlock small sites for SMEs with pilots to be held in Lewisham, Sheffield and Bristol. The scheme will unlock sites that would otherwise be left undeveloped with the aim of attracting private investment to build new social rent homes and follows Lloyd’s Banking’s Social Housing Initiative model.
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.”
“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.”
The MHCLG commented: “The current system makes it far too difficult for smaller builders to get spades in the ground – with a small site of ten homes jumping through the same planning hurdles as one with 100 or more. Smaller firms, which provide local jobs and train eight out of ten 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.”
Neil Jefferson, chief executive of 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 housebuilders. 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 housebuilders of all sizes from accelerating output.”
Further support for SME housebuilders announced today includes:
- £100million in SME Accelerator Loans to help smaller firms grow and invest using part of the £700million extension to the Home Building Fund announced in December
- £10million for councils to fund more specialists to speed up environmental assessments
- A £1.2million PropTech Innovation Fund to support innovation in small site delivery
Richard Beresford, chief executive of the National Federation of Builders (NFB), said: “This is a huge win for the NFB. 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.”
