Small- and medium-sized home builders are facing mounting barriers on small sites, with planning delays, rising costs, and new levies threatening their viability, according to a new report.
‘Planning for Small Sites’, from the Home Builders Federation (HBF) and Quantum Development Finance, found that in 2024, just 17,000 homes were approved on small sites of 3–9 units, down from an average of 35,000, with planning permissions on sites of 150 units or fewer falling from nearly 20% in 2008 to 6–8% today.
The report finds that 94% of small-site applications miss statutory determination deadlines, with average approval taking 30 weeks to committee decision plus 21 weeks for formal permission.
SMEs also face high fees, lengthy Section 106 negotiations, and new policy costs including the Building Safety Levy, Biodiversity Net Gain, and potential landfill tax rises.
HBF calls for better local planning authority resourcing, standardised agreements, and faster planning processes to ensure small builders can continue delivering locally supported housing.
Neil Jefferson, chief executive at the Home Builders Federation, said: ‘While Government wants to assist SMEs, the barriers our members are facing is substantial, and needs intervention to reverse the trends of declining small site approvals we are seeing.
‘If we are to deliver new housing at the levels Government is aspiring to, it is critical that developments and businesses of all sizes are supported and that SMEs are given the opportunity to grow.’
