Announced today, the government said smaller sites faced the same planning hurdles as larger developments, and added that SME builders had seen their market share shrink since the 1980s.
It has been proposed that smaller developments of up to nine homes will have streamlined planning and eased Biodiversity Net Gain (BNG) requirements, with faster decisions being taken by expert planning officers, not planning committees.
The government will also introduce a new ‘medium site’ category for developments with 10-49 homes, which will benefit from simpler rules and fewer costs. This will include an exemption from the Building Safety Levy and simplified BNG rules.
Further, Homes England will release more of its land exclusively to SMEs, and a National Housing Delivery Fund will be confirmed at the Spending Review on 11 June. This fund will support long-term financing such as revolving credit facilities and lending alliances.
There will also be a Small Sites Aggregator pilot in Bristol, Sheffield and Lewisham in London to unlock sites that would not otherwise have been developed. This is expected to attract private investment for social rent homes, and will build on a model developed by Lloyds Banking Group’s Social Housing Initiative.
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The aim of the pilot is to address the housing shortage and unviable small plots of land, while creating local jobs.
The status quo has ‘failed’ SME housebuilders
Angela Rayner, deputy Prime Minister and Housing Secretary, 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.”
Charlie Nunn, CEO of Lloyds Banking Group, added: “We strongly welcome the government’s announcement today that it will pilot the Small Sites Aggregator in Bristol, Sheffield and Lewisham.
“Through the Social Housing Initiative, we’re proud to have helped ignite this innovation in housing development and finance – unlocking the small, brownfield sites in our communities [that] are lying empty yet have immense potential to provide good-quality homes in our towns and cities.
“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.”
Action needed sooner rather than later
Neal Moy, development finance managing director at Paragon Bank, welcomed the announcement.
He 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.”
