Government Sets Out New Measures for SME Housebuilders

The Government has unveiled new reforms aimed at boosting small and medium-sized (SME) housebuilders in England, with a particular focus on easing planning rules, streamlining processes, and providing financial support. The measures, outlined in a recent  press release from the Ministry of Housing, Communities and Local Government are part of the wider “Plan for Change” strategy which targets the delivery of 1.5 million new homes across the country.

Deputy Prime Minister and Housing Secretary Angela Rayner said the reforms are designed to support SME builders – a group that has seen its market share shrink dramatically since the 1980s – by “levelling the playing field” and making it easier for smaller firms to contribute to national housing targets.

The reforms include:

• Streamlined planning for minor developments of up to nine homes, with expert planning officers making decisions rather than full committees.
• A new ‘medium site’ category (10–49 homes) facing simpler rules and potential exemption from the Building Safety Levy.
• Expanded access to land and finance, including a new National Housing Delivery Fund and the release of more Homes England land to SMEs.
• A pilot Small Sites Aggregator scheme to unlock development of small brownfield sites, with input from Bristol, Sheffield, and the London Borough of Lewisham.
• £100 million in SME Accelerator Loans and further investment in planning and innovation to support these builders.

The Government says these changes are crucial to unlocking stalled housing delivery, particularly on smaller sites, while providing local employment and training opportunities.

However, these proposals have sparked debate, especially around the planned review of Biodiversity Net Gain (BNG) requirements. Introduced as part of the 2021 Environment Act, BNG requires developers to offset biodiversity loss from new projects by delivering a 10% net gain in habitats over a 30-year period.

According to reporting by the BBC, the Government is consulting on how to ease these requirements for smaller sites, arguing that disproportionate costs and regulatory burdens have constrained SME builders. Ministers stress the reforms aim to balance the need for new homes with environmental stewardship, but concerns have been raised by environmental organisations.

Richard Benwell, Chief Executive of Wildlife and Countryside Link, warned that exempting small sites from BNG requirements could mean “almost three-quarters of developments face no requirement to compensate for nature loss – let alone enhance it.” Conservation groups argue this risks undermining the Government’s broader goals for nature-positive planning.

The Government counters that it is seeking a “pragmatic” approach to help SMEs deliver homes while still supporting biodiversity and sustainability. A consultation on BNG for small and medium sites is now open, and additional funding has been announced to strengthen local planning resources and support faster approvals.

The RSN recognises the potential impact of these reforms for rural communities, particularly where smaller builders are often best placed to deliver housing on modest sites that meet local needs. While the proposed changes aim to remove barriers and encourage development, it will be essential to monitor their implications for both housing delivery and environmental sustainability in rural areas.

We will continue to engage with members and stakeholders to assess the potential opportunities and challenges these reforms present, and to ensure that rural voices are heard in ongoing consultations.

We’d like to hear your views on how these proposed changes could affect local development. Share your thoughts with us as we continue to represent rural voices in national policy discussions.