The time taken for small and medium enterprises (SMEs) to achieve an outline planning permission has increased significantly from around 13 to 14 weeks in the 1990s to a whole year in 2023, according to research commissioned by the Land, Planning and Development Federation (LPDF) and United Trust Bank (UTB).
The costs SMEs are facing have been rising substantially, with a typical planning permission costing £12,000 (£28,000 in today’s money) in the 1990s, compared with the £125,000 it costs to obtain an outline permission today.
That is nearly 4.5-times the 1990s cost in real terms.
The report, ‘Small builders, big burdens’ made recommendations to reduce the burden placed on SME housebuilders.
The recommendations included the simplification of the requirements for outline planning permissions, the allocation of more land suitable for development, and the reduction or elimination of fees for smaller sites.
Adam Bovingdon, head of property development at United Trust Bank, said: “UTB is committed to supporting SME housebuilders with our funding supporting the creation of around 7000 new homes at any one time.
“We are pleased to have the opportunity to support this important study which highlights the huge burden the UK’s dysfunctional planning system places on housebuilders and most particularly small and medium sized operations which find it much more difficult to employ the economies of scale available to larger businesses.
“Lenders like UTB are queueing up to provide experienced housebuilders and developers with the money they need to create the many thousands of homes we need to build each year.
“Establishing a planning system which is fit for purpose should be one of the main priorities of this Government and the next.”
Paul Brocklehurst, chairman of the LPDF, added: “SME housebuilders are the lifeblood of our industry but they are finding it harder and harder to deliver the homes that this country so desperately needs.
“This new research shows how we have gone backwards over the last thirty years in terms of the time and the money it takes SMEs to get planning permission. No wonder they’re collapsing in number.
“Without action from the Government to help SME housebuilders and a more proportionate approach I fear we will only see further decline.”
