Good news for small construction firms – Labour is claiming to make life a whole lot easier for the UK’s smaller housebuilders. After years of feeling pushed to the sidelines, plans are now in motion to “level the playing field” and give SME builders a fair shot at growing their share of the housing market.
Last week, Deputy Prime Minister and Housing Secretary Angela Rayner announced a sweeping set of planning reforms designed to simplify the rules, lower costs, and cut through the red tape that’s been holding smaller developers back for decades.
The Numbers Speak for Themselves
In the 1980s, SME builders accounted for around 40% of the UK’s housebuilding sector. Fast forward to today, and they’re down to just a sliver of the market. Rayner said that this “decades-long unfair treatment” has to stop.
“Smaller housebuilders must be the bedrock of our Plan for Change,” she said. “It’s time to level the playing field so they can help us build the 1.5 million homes we need by 2029–30.”
What’s Actually Changing?
Under the new reforms:
- Planning decisions for developments of up to nine homes will be taken out of councillors’ hands and given to professional planning officers – saving time and hassle.
- A new “medium site” category (developments of 10 to 49 homes) will have streamlined rules, reduced costs, and exemptions from the Building Safety Levy.
- Biodiversity requirements will be relaxed for smaller projects.
- There’s also £100 million in Accelerator Loans for SMEs, part of a £700 million boost to the Home Building Fund.
Rayner didn’t stop there. Councils will receive an additional £10 million to hire specialists who can expedite environmental assessments. Homes England will release more land specifically for small builders. A new National Housing Delivery Fund will offer long-term financing options to help projects get off the ground.
Industry Response: “Long Overdue, but Very Welcome”
The Federation of Master Builders (FMB) was quick to show support. Jeremy Gray, Head of External Affairs at the FMB, called it “a big change for the planning system,” and said the move finally acknowledges the real struggles that small firms have faced.
And it’s not just about volume. Jon Di Stefano, Chief Executive of Greencore Homes, said the changes would have a “transformative effect” on not just how many homes get built, but also how well they’re built, in terms of sustainability and quality.
Pilot Projects Already Underway
To make sure it’s more than just policy on paper, Labour is already piloting a Small Sites Aggregator scheme in Bristol, Sheffield, and Lewisham. The idea is to unlock overlooked plots of land and attract private investment to build affordable homes for social rent. In this area, smaller builders can make a big difference.
Why This Matters
Let’s face it: the UK’s housing crisis won’t be solved by big developers alone. If we’re serious about reaching the target of 1.5 million homes, we need to empower local, nimble builders who know their communities and can build homes quickly, affordably, and sustainably.
These reforms signal a shift in mindset – one that values smaller firms as key players in the future of UK housing.
