Planning burdens for small housebuilders will be eased to allow them to build homes at a greater pace, the Deputy Prime Minister says.  

Angela Raynor adds that the housing department she leads has introduced new reforms across land and regulation, which are “backed by a cash boost to help SME housebuilders”. 

She says this will allow “thousands of homes to be built faster on smaller sites across the country”.   

The department adds that it is currently “far too difficult for smaller builders to get spades in the ground,” with a small site of 10 homes “jumping through the same planning hurdles” as one with 100 homes, or more. 

It points out that smaller developers, which provide local jobs and train eight out of 10 construction apprentices, have seen their market share shrink since the 1980s, when SME builders built 40% of UK homes.     

The department’s proposals are part of Labour’s key ambition of building 1.5 million homes over the next five years. 

Its plans for small housebuilders include: 

• Faster decisions for small sites — Developments of up to nine homes will benefit from streamlined planning and eased biodiversity rules. Decisions will be taken by planning officers and not planning committees for speed

• A new ‘medium site’ category — Sites between ten to 49 homes will face simpler rules and fewer costs – including a proposed exemption from the Building Safety Levy and eased biodiversity rules 

• Greater land and financing options for SMEs — Homes England will release more of its land exclusively to SMEs. A new National Housing Delivery Fund to be confirmed in next month’s spending review will support long-term finance options, such as revolving credit facilities and lending alliances 

• Pilot to unlock small sites for SMEs — The small sites aggregator pilot in Bristol, Sheffield and Lewisham, in London, will unlock sites that would otherwise not have been developed, while attracting private investment to build new social rent homes. This model builds on Lloyds Banking Group’s social housing initiative

• £100m in SME accelerator loans — To help smaller firms to grow, which uses part of the £700m extension to the Home Building Fund announced in December 

• An extra £10m for councils — This will be to fund more specialists to speed up environmental assessments 

• Establishes a £1.2m PropTech innovation fund — This will support innovation in small site delivery through the use of new data tools, for example 

Rayner says: “For decades the status quo has failed smaller housebuilders 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.” 

Home Builders Federation chief executive Neil Jefferson says: “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.” 

But Jefferson adds: “However, while 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.”