A brand new report, Planning for Small Websites, from the House Builders Federation (HBF) and Quantum Growth Finance, utilizing evaluation from Lichfields, reveals that small- and medium-sized (SME) dwelling builders face mounting boundaries, stalling supply on smaller websites and intensifying the nation’s housing scarcity.
In 2024, simply 17,000 houses have been accredited on small websites of three to 9 items, down from a median of 35,000, with the proportion of complete planning` permissions granted on websites of 150 items or fewer, plummeting from almost 20% in 2008 to 6-8% as we speak, in accordance with the report.
The report finds that planning delays, rising prices, and rising regulatory complexity are combining to make many smaller schemes unviable, regardless of their significance for quick, locally-supported housing supply.
Timescales going through planning functions for small websites are unreasonable and unmanageable, with 94% of functions lacking the statutory dedication deadline. The report exhibits that it takes on common 30 weeks from utility to committee resolution and an additional 21 weeks to safe formal permission. Purposes determined at committee take 53 weeks on common, 10 weeks longer than delegated choices. 13% of web sites took over two years to safe permission and 5 schemes took over three years. Moreover, evaluation of experiences throughout websites in varied cities exhibits that small websites confronted common planning charges and obligations of roughly £2 million per website.
One of many many causes for the timescale delays highlighted within the report is the time taken to finalise Part 106 agreements, as a scarcity of standardisation in drafting agreements usually results in protracted negotiations and authorized delays, with 76% of native authorities reporting common negotiation timescales exceeding 12 months. Alongside this, delays in responses from statutory consultees can also be contributing to the protracted course of.
The December 2023 improve in planning charges on Native Planning Authorities’ (LPAs) assets and their capability to find out functions in a well timed method has additionally a adverse influence on SMEs. Earlier analysis from HBF discovered that 80% of Native Planning Authorities (LPAs) function under full staffing capability. Nonetheless, the report finds that, following the payment improve, 87% of councils used further earnings to help planning features, but 24% nonetheless say charges are inadequate to cowl prices.
Alongside this, wider market boundaries have influence of the planning delays and prices, vital coverage pressures additionally fall hardest on SME dwelling builders:
Some 98% of SMEs report implementation challenges with Biodiversity Internet Acquire, while 94% report utility delays on account of BNG
From autumn 2026, the Constructing Security Levy is predicted so as to add 1000’s of kilos of further value to construct per dwelling, no matter top
The current HM Treasury Landfill Tax session would see charges for a lot of the waste from dwelling constructing websites rising by 3000%, probably including round £15,000 per dwelling and, in some circumstances, over £50,000 as a de facto new levy on new houses
An absence of curiosity in Part 106 Reasonably priced Housing from Registered Suppliers is delaying the supply in round 8,500 items
Nutrient neutrality acts as a serious blocker with SMEs unbale to manoeuvre round this utilizing costly strategic mitigation schemes or land for offsetting
The Planning and Infrastructure Invoice will enable LPAs to totally get well utility prices by means of greater charges, which MHCLG admits may disproportionately influence SME builders by considerably rising the price of minor functions
Latest coverage measures introduced by the federal government to help SMEs have been welcomed, together with introducing a medium website class and exempting developments of 49 or fewer houses from the Constructing Security Levy, nonetheless, even additional reaching help is required, most crucially on rushing up the planning course of.
HBF is urging authorities to make sure that LPAs are sufficiently staffed and resourced by rising the variety of planners, with planning delays of LPA resourcing significantly affecting SMEs. Authorities also needs to introduce frequent adoptable requirements for infrastructure and obligatory adoption inside wise timeframes and a regular template for Part 106 agreements.
HBF additionally pushed for the forthcoming modifications to planning charges to supply certainty on the nationwide default payment stage; outline what constitutes a value restoration foundation; make clear the way it will help LPAs going through a drop in functions; and carefully monitor their efficiency.
Neil Jefferson, chief govt on the HBF, stated: “SME dwelling builders play a useful function in delivering houses for the UK, serving to to coach the workforce and boosting native economies.
“With a big proportion of the houses that SMEs construct falling inside the small website class, the findings from this report present that as a gaggle they’re in actual hazard of not simply being unable to ship houses however being unable to remain in enterprise.
“Whereas authorities needs to help SMEs, the boundaries our members are going through is substantial, and desires intervention to reverse the traits of declining small website approvals we’re seeing.
“If we’re to ship new housing on the ranges authorities is aspiring to, it’s crucial that developments and companies of all sizes are supported and that SMEs are given the chance to develop.”
Oliver Thompson, chief govt at Quantum, commented: “SME housebuilders are important to the well being of the UK housing market, but for lots of the companies we work with, the journey from buying a website to delivering new houses has by no means been tougher or unsure.
“This report highlights the implications of the present planning course of and illustrates that the system now calls for a stage of monetary resilience that disadvantages SME housebuilders.”
“Whereas we welcome the federal government’s current steps towards reform, the tempo of change should speed up. If we’re severe about fixing the housing disaster, we should repair the system and guarantee SME housebuilders are supported.”
