Government Moves to Back SME Developers

Here is a breakdown of the key changes that could directly impact your development schemes:

1. Fairer, Simpler Planning Rules for Smaller Sites

The Government is looking at how the planning system can better reflect the scale of development. A new working paper from the Ministry of Housing, Communities and Local Government (MHCLG) proposes:

• Scaled Planning Requirements: Lighter, more proportionate planning obligations for small and medium-sized sites.
• Focus on Efficiency: Larger, strategic developments will continue to face more rigorous scrutiny, while SMEs should benefit from a more streamlined route through the system.

What it means for you: Less red tape and more predictable planning processes.

2. Faster Approvals Through Biodiversity Reform

Defra is consulting on how Biodiversity Net Gain (BNG) rules should apply to small and medium sites. The goal is to avoid unnecessary delays while still meeting environmental targets.

• Simplified BNG for SMEs: Options under review could make it easier to meet biodiversity requirements without long delays.

• Support for Local Authorities: An extra £10 million will be made available for councils to hire ecologists, which should speed up the BNG assessment process.

What it means for you: Faster turnaround times for planning decisions where ecology has been a bottleneck—and less risk of being held up by staffing shortfalls in planning departments.

3. Streamlined Planning Committees

A major shift is coming in how planning committees handle applications, with a new national scheme of delegation under consultation:

• Tier A Applications: Must be decided by officers (typically minor and technical cases).

• Tier B Applications: Presumed to be officer-delegated but may be reviewed by the planning committee if flagged by the chair and chief planner.

What it means for you: Fewer delays caused by waiting for committee slots for straightforward applications. Your simpler schemes should move through the system faster.

4. More Access to Land and Finance

In addition to planning changes, the government is opening up more opportunities for SMEs to access land and funding:

• Homes England Land Sales: More land will be released specifically for SMEs.

• £100m for SME Accelerator Loans: Funding support through the Home Building Fund, helping with upfront development costs.

• Small Sites Aggregator Pilot: A new initiative to develop otherwise unviable small plots for social rent—potential joint working or disposal opportunities.

What it means for you: Greater access to land, improved cash flow support, and new chances to work on sites that may have previously been out of reach.

Next Steps for Developers

These proposals are currently out for consultation, so changes are not immediate—but they indicate a clear direction of travel. If implemented, they could significantly improve the viability and delivery speed of SME-led schemes.

We Recommend

• Keeping in touch with your planning consultant to track progress on the reforms.

• Reviewing your pipeline for sites that could benefit from a more efficient process.

• Exploring the SME Accelerator Loans if you are planning to expand activity in the next 12–24 months.

In Summary

This is a welcome signal from Government that SME developers are a key part of solving the UK’s housing crisis. These reforms could offer faster routes to permission, simpler planning expectations, and better access to land and finance—exactly what’s needed to get more homes delivered on the ground. These proposals are a step in the right direction.

For additional information, get in touch with Yildiz Betez on 020 8461 6214.