The process of obtaining planning permission in the UK has long been a significant challenge for home builders. The Home Builders Federation Report confirms that the two main obstacles for SME housebuilders are, chronic delays in the planning system and over-stretched Local Authority planning departments.

Key findings in the report include:

  • Major growth barriers: A staggering 93% of SMEs identify delays in obtaining planning permission as a significant hurdle to their growth.
  • Under-resourced planning departments: 91% say planning departments in local authorities are under-resourced, hindering growth of SME homebuilders.
  • Escalating costs: Nearly half of respondents (46%) say the cost of obtaining planning permission has surged by over 30% in the last three years – even before the planning fee increases were introduced in December.
  • Falling confidence: Just 13% think the Government’s current approach on housing and planning was positive for first time buyers, marking a significant decline from 39% in 2022.

Stewart Baseley, Executive Chairman of the Home Builders Federation highlights the severity of the situation, citing that,

"The increasingly onerous policy and regulatory environment has seen the number of SME house builders plummet in recent years."

He emphasises the urgent need for a reversal of the anti-development stance by the government, to prevent further dissolution of SME housebuilders. Delays in planning permission have had a significant impact on SMEs who often have large amounts of money tied up in developments that are awaiting planning permission. Unlike larger plc developers, SMEs struggle to generate cash flow between projects and face the risk of acquisition or even ceasing operations altogether.

Overall, SME developers play a crucial role in providing high quality housing for local communities. They usually operate within smaller communities and so tend to be more committed to ensuring houses are a good fit for the environment they are built within. As a result, it is important for the government to prioritise the resolution of planning delays, otherwise we will continue to see a quick decline in these critical businesses.