Plan for Change: How the New Rules will Impact Small Housebuilders

What does the Plan for Change mean for small housebuilders? 

 The new Plan for Change aims to introduce: 

• Quicker decision making by ensuring small developments of up to nine homes benefit from streamlined planning and eased Biodiversity Net Gain (BNG) requirements, with faster decisions being taken by expert planning officers, not planning committees. 

• A new ‘medium site’ category, meaning sites of 10 to 49 dwellings will face simpler rules and fewer costs – including a proposed exemption from the Building Safety Levy and simplified BNG rules, making it easier to deliver biodiverse habitats on these sites, delivering a win-win for nature and development. 

• More land and financing options, resulting in Homes England releasing more of its land exclusively to SMEs, and a new National Housing Delivery Fund which will support long-term finance options, such as revolving credit facilities and lending alliances.   

• A new pilot to unlock small sites for SMEs. The Small Sites Aggregator will bring together small brownfield sites that would otherwise not have been developed, and attract private investment to build new social rent homes and address temporary accommodation challenges. This will help tackle the housing shortage, address unviable small plots of land, and create local jobs supporting the government’s Plan for Change. 

• £100 million in SME accelerator loans to help smaller firms grow and invest using part of the £700 million extension to the Home Building Fund announced in December.  

• £10 million for councils to fund more specialists to speed up environmental assessments, getting spades in the ground faster.  

• A £1.2 million PropTech innovation fund to support innovation in small site delivery, for example through use of new data tools. 

There are two main challenges which small housebuilders commonly face. One is the planning process, in the sense that it’s lengthy and there are a lot of requirements which they have to meet.  The other is funding, both in terms of accessing finance and the lengthy timescales involved. 

 Small housebuilders will save both time and money, as the support they require has been reduced by streamlining and speeding up both processes. 

 The Plan for Change presents several benefits for housebuilders and local authorities, including: 

Faster planning process 

On the face of it, the main positive is that the planning process should be sped up and as a result, small housebuilders should incur lower costs as they won’t need to go back and forth to planning committees, meaning developments are signed off faster. 

Increased developments 

Many small housebuilders also operate on a site-by-site basis, meaning they won’t start a second project until the first has been delivered and all plots have been snapped up. By speeding up development times however, we can empower our smaller builders to focus more on building and less on administration. It will provide a huge boost to the UK Government’s plans to deliver 1.5million new homes over the next five years. 

Levelling the brownfield 

By making it easier to identify and build on brownfield sites, it will provide a major boost to smaller housebuilders, particularly those operating in urban areas. 

Towns and cities across the UK are full of pockets of brownfield land which have stood dormant as they’re too costly or difficult to develop, and many of these sites are in areas which have the highest demand and need for new housing. 

By making it easier and more cost-effective to develop on such sites, we can break down the barriers to entry for those enterprising small housebuilders who are able and willing to rise to the challenge of addressing the nation’s housing shortage.  

Less BNG regulation 

Relaxed BNG requirements will provide an immediate saving in development costs and require less administration and legal support.  

 Increased finance options 

 It’s always a positive if there are more funding options available, however we haven’t yet seen the devil in the detail when it comes to the new funding options.  

 That said, more available funding options in the form of the National Housing Delivery Fund can only be a positive for smaller housebuilders. 

Reduced local authority strain 

It’s no secret that local authorities the length and breadth of the UK are facing increased financial pressures, so by reducing the strain on planning departments, the Plan for Change will help authorities channel significant time and money into other, more pressing, areas.  

Where can I find out more? 

 Interested in finding out more about the Plan for Change and how your business can best capitalise on the new proposals?   

Speak to the commercial property team at Square One Law.