Can Planning Reforms Finally Unlock SME Housing Growth?
For SME housebuilders, the rising costs, complexity, and uncertainty in the planning process have been a disincentive to investment and have hampered their ability to scale up.
The Government’s emerging proposals to streamline the requirements and decision-making process for smaller and medium-sized sites are therefore a welcome move to give SMEs more confidence to invest in taking new sites through the planning process.
We now hope that the Government’s ambitious moves to stimulate supply through planning reform are matched by an equal ambition to stimulate demand — both in terms of assistance for first-time buyers and in supporting the uptake of Section 106 affordable units on smaller sites.
Why This Matters Now
With the new Labour Government now settling in and the recent spending review triggering significant shifts in the sector, we asked industry leaders like Billy for their views on what’s ahead. His comments reflect widespread hopes among SME developers that the planning system is finally moving in their favour.
The proposed framework, released at the end of May, aims to make the planning process simpler and faster for SME developers. This is particularly significant because SMEs play a vital role in UK housing delivery, yet many have struggled under the weight of planning complexities.
Recognising that the current system disproportionately affects SME developers — especially in terms of time, cost, and complexity — the Government is considering a gradated planning system for developments of 10-49 homes. This would fill a long-standing gap between minor and major applications, potentially unlocking stalled sites that are currently too large for ‘minor’ permissions but too small to justify the heavy costs of ‘major’ planning applications.
The Bigger Picture for SMEs
With the new Labour Government now settling in and the recent spending review triggering significant shifts in the sector, we asked industry leaders like Billy for their views on what’s ahead. His comments reflect widespread hopes among SME developers that the planning system is finally moving in their favour.
The market is a challenge, with affordability a real issue for aspiring customers, which naturally reduces sales rate. This looks set to continue in the absence of any government stimulus for home buyers, particularly when stamp duty has risen, with investor buyers discouraged and interest rates not materially reducing. That said, we focus at Metis on delivering a diverse range of new homes with real character and when the design, workmanship and specification is right, customers who can afford to buy will do so.
Beyond the market, Adam highlights persistent barriers in the planning system:
Of greater concern is the broken planning system, which is a constant barrier to growth. The grand announcements in central government that they are ‘Getting Britain Building’ and ‘Removing the Blockers’ need to convert into actual decision-making locally, so that well-considered planning applications that carry professional officers’ positive recommendations are permitted. This is not yet happening.
Despite these hurdles, he underlines that Metis Homes remains committed to the core principles of sound land acquisition, thoughtful design, professionalism and a high level of customer service.
Key ideas under consideration include:
- Simplifying Biodiversity Net Gain (BNG) requirements
- Exploring exemptions from the proposed Building Safety Levy
- Raising the Permission in Principle threshold
- Streamlining Section 106 negotiations
Looking Ahead
The Government’s proposed planning reforms signal a long-overdue recognition of the vital role SME housebuilders play in addressing the UK’s housing shortage. However, as industry voices like Billy Clements and Adam O’Brien have made clear, meaningful change will only occur if these high-level ambitions are translated into real, on-the-ground improvements, faster decisions, more transparent processes and genuine support for both developers and buyers.
For now, the sector remains cautiously optimistic. If the momentum behind these reforms continues, we could finally see the unlocking of thousands of much-needed homes, built by the very SMEs that have been side lined for too long.
We will continue to follow the progress of these reforms and will provide timely updates on their potential impact on the SME housebuilding sector as further details emerge.
