The proposals, announced by Deputy Prime Minister and housing secretary Angela Rayner, aim to “level the playing field” for smaller firms and accelerate progress toward the Government’s goal of building 1.5 million new homes.

Under the new proposals, development sites of fewer than 10 homes, categorised as ‘minor’ developments, will benefit from streamlined planning rules, expedited decision-making, and eased Biodiversity Net Gain (BNG) requirements. A new middle tier of ‘medium’ residential developments, encompassing sites of 10 to 49 homes, is also being introduced. These sites could enjoy simpler BNG rules and exemptions from the Building Safety Levy, making them more viable for smaller builders.

Angela Rayner stated: “Smaller housebuilders must be the bedrock of our Plan for Change to build 1.5 million homes and fix the housing crisis we’ve inherited. For decades, the status quo has failed them, and it’s time to level the playing field.”

The reforms are outlined in two newly released consultation documents: Planning Reform Working Paper: Reforming Site Thresholds and Reform of Planning Committees: Technical Consultation. One of the more controversial proposals is a national scheme of delegation that would shift the majority of minor and technical applications away from elected planning committees and into the hands of planning officers, aiming to reduce bureaucratic delays.

The reaction from the housebuilding industry has been overwhelmingly positive. Richard Beresford, chief executive of the National Federation of Builders (NFB), called the changes “a huge win” for SME builders.

“I am immensely proud of our housebuilding members and staff for never giving up on their campaign for a medium-sized site definition,” said Beresford. “We never expected it to take seven years of lobbying, but we are delighted that the Labour government understood the importance of this change within twelve months.”

Rico Wojtulewicz, head of policy and market insight at the NFB and House Builders Association (HBA), emphasised that the move reflects a more proportionate and nuanced approach to planning policy. “A ‘Medium’ sized site helps rid us of the antiquated Minor and Major site definitions that have damaged SMEs for decades. It establishes a mindset that recognises development impact and finally gives brownfield and infill sites a realistic path to allocation in Local Plans.”

The reform package includes several additional measures aimed at strengthening the SME sector:

• Faster decisions for Minor sites: Applications for up to nine homes will be processed more quickly by planning officers with relaxed BNG requirements.
• New Medium site category: Developments of 10 to 49 homes will see reduced regulatory burdens and costs, such as exemptions from the Building Safety Levy.
• Improved land access and financing: Homes England will release land specifically for SMEs, and a new National Housing Delivery Fund—set to be outlined in the next spending review—will support long-term finance options, including revolving credit.
• Small Sites Aggregator pilot: Trials in Bristol, Sheffield, and Lewisham aim to unlock small urban plots that would otherwise remain undeveloped, with a focus on delivering social rent homes.

The small sites aggregator model builds on the idea that came from and was developed within the Lloyds Banking Group Social Housing Initiative. It is hoped it will help tackle the housing shortage, address unviable small plots of land, and create local jobs supporting the government’s Plan for Change.

CEO of Lloyds Banking Group, Charlie Nunn, said: “We strongly welcome the government’s announcement today that it will pilot the Small Sites Aggregator in Bristol, Sheffield and Lewisham.

“Through the Social Housing Initiative, we’re proud to have helped ignite this innovation in housing development and finance – unlocking the small, brownfield sites in our communities which are lying empty yet have immense potential to provide good quality homes in our towns and cities.

“This exciting partnership between the public and private sectors will increase investment at pace into the new, genuinely affordable homes that are needed across the UK.”

While the reforms are widely welcomed, industry leaders stress that further support is necessary to fully revitalise the sector. Jeremy Gray, head of external affairs at the Federation of Master Builders (FMB), noted that while the changes mark significant progress, challenges remain.

“The small site allocation in Local Plans must be revisited to realise the full potential of SME builders,” said Gray. “Planning departments also need investment to improve capacity and communication, which continues to be a major bottleneck according to our latest Housebuilders’ Survey.”

The consultation on these planning reforms is now open, with stakeholders across the sector encouraged to participate.