Reforms in the new version of the national planning policy framework (NPPF) include a presumption in favour of development on brownfield land and a requirement for councils to review greenbelt boundaries to meet house-building targets, identifying and prioritising lower quality ‘grey belt’ land. Councils are also getting targets imposed upon them from above – a policy tried and then abandoned by the previous government.
The government published a draft version for consultation soon after coming into office in July 2024 so much of it had been foreshadowed
The Federation of Master Builders (FMB) said that the NPPF revisions were a welcome boost to build more homes but the failure to increase the percentage of small site allocations from the existing 10% was “a big disappointment”.
FMB chief executive Brian Berry said: "Changes to the planning system are long overdue and the government's decisive action to ensure that new homes are built is very positive, with SME house-builders long reporting that the planning system is the biggest hinderance to delivering new homes. The pragmatic approach to the green belt and local targets is much needed as they may help push through homes where they're needed most. But not revising the small site allocation in local plans is going to come as a disappointment for small house-builders, who desperately need available land to build on, which they've been reporting as a blocker for years. The government’s reforms must be seen as the start of the process to help diversify an increasingly restricted housing market, as the current changes don't shift the dial enough for micro house builders.”
Berry continued: "Other fundamental issues are also at play. Small house builders are at the sharp end of the planning system, often having to jump through the same hoops as volume developers. While any increase to planning officer numbers is welcome, the 300 proposed is a drop in the ocean and will not turn the tide for the nation’s local house builders. SME house builders frequently cite poor resourcing of planning departments and the subsequent poor communication from them as the number one reason they can't build new homes. We need to see this change."
The Federation of Small Businesses (FSB) is also concerned for the smaller building firms. Policy chair Tina McKenzie said: the planning announcements were welcome but “just one part of the puzzle”.
She said: “Government now needs to seriously consider how these homes are going to be built. It simply cannot happen with a focus purely on larger volume builders, who cannot efficiently address the smaller sites needed to achieve the target number of new homes. The only way government can hit these targets is to involve and utilise the nation’s army of small house-builders.
“We’re calling on government to publish a small house-builder strategy that includes a long-term plan and programme of support for the sector, so they can achieve their potential in contributing to the targets.
“We’re keen to work with government to ensure small construction firms are brought into the fold, which would not only help reach their ambition, but also give the sector a much needed helping hand. FSB's latest Small Business Index showed confidence amongst construction firms is critically low at minus 26.6 – one of the lowest of the main sectors.
“This targeted strategy needs to include support to build on brownfield and grey belt sites via a development relief fund; moving community infrastructure levy funding costs to later in the project to protect cash flow; and protections against the scourge of late payments made worse by retention payments in the sector. Supporting the increased use of project bank accounts would be beneficial, getting small firms paid quickly once the job is complete.
“Now is the time to build a durable approach to help small housebuilders deliver.”
Rico Wojtulewicz, head of policy and market insight at the National Federation of Builders and the House Builders Association (HBA) said: “The review has taken us into a more positive planning place but unfortunately it remains crumbs for SMEs and a long way to go to hit the 370,000 new homes a year target.”
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