If the UK is to meet its housing delivery targets, SME developers must be able to operate in a market that genuinely works for them. The latest Government proposals suggest this is now better recognised at policy level, and that there is a growing understanding of the barriers that smaller developers continue to face.
Angela Rayner, Deputy Prime Minister and Housing Secretary, has outlined a series of reforms intended to give SME developers a clearer route to market. For those grappling with planning delays, restricted land access and tightening funding conditions, these measures could represent welcome progress. However, the test will be whether they translate into meaningful change at ground level.
A look at the proposals
One of the headline proposals is to introduce a more streamlined planning process for small sites, with delegated officer decisions for developments of up to nine properties. This could help address one of the most common frustrations for SME developers: lengthy and unpredictable planning delays that can hold up otherwise viable schemes for months, or even years. Faster decisions are clearly welcome, though they will only be effective if local planning departments are properly resourced and accountable.
The Government is also proposing a new medium site category, covering schemes of 10 to 49 properties. These sites would benefit from simplified biodiversity requirements and exemption from the Building Safety Levy, helping to ease some of the cost and viability pressures that smaller developers face.
Beyond planning, the proposals include steps to improve land access, which has long been a major challenge for SME developers. Homes England is expected to release more land specifically for SME builders, supported by a new National Housing Delivery Fund to improve access to both land and finance. In addition, a pilot Small Sites Aggregator will look to combine smaller brownfield plots that might otherwise remain underutilised.
Realism on delivery
These are sensible proposals that reflect many of the issues developers, lenders and industry bodies have raised in recent years. However, it is important to be realistic about the pace and impact of any reforms.
Planning remains highly inconsistent across the country. Some authorities are severely under-resourced, with wide variations in decision times and processes. Delegated officer decisions for smaller sites will help, but capacity remains the critical constraint. Without sufficient investment in local planning departments, even well-intentioned reforms may struggle to shift the dial.
Land access is another key issue. Smaller developers remain at a disadvantage when competing with larger housebuilders that can afford to land-bank. Releasing more land for SME builders is positive, but the mechanism will need to be carefully managed to ensure genuine access and opportunity.
Above all, SME developers need certainty. They cannot plan their businesses around future reforms or untested pilots. They need to know that the planning process will be consistent and that funding will be available when it is needed.
Funding certainty is critical
In the current market, access to funding remains as important as access to land or planning consent. Developers want lenders who can offer consistency, flexibility and real partnership.
Recent years have seen some lenders become more cautious, tightening criteria and reducing leverage. Developers managing multiple schemes need funding that is pragmatic and aligned to how they operate.
This is why we have focused on increasing our ability to support clients as they grow. We recently raised our maximum lending to £35m per borrower to meet the needs of developers scaling up. We have also introduced revolving credit facilities to give experienced developers flexibility across multiple projects, without the need to negotiate separate agreements for each site.
Crucially, our funding is backed by a strong savings base, not external credit lines. In a market where funding volatility remains a concern, that level of certainty is a key differentiator for many of our clients.
Looking ahead
The Government’s ambitions to increase housing delivery are well placed. SME developers must be central to that effort. Planning reforms and improved land access are important steps, but they will only translate into delivery if backed by consistent, flexible funding and a market environment that developers can rely on.
Certainty is the foundation that enables developers to commit to new schemes and to invest in their businesses. While policy may take time to evolve, it is vital that lenders continue to provide the stability and partnership that SME developers need today.
That is where we remain firmly focused.
Neil Leitch is managing director of development finance at Hampshire Trust Bank
