Reversing the decline of small housebuilders

8
Summary (cont...)
Land and planning
The availability of suitable housing sites, and the
constant struggle of securing an implementable
planning consent through a planning process
beset by delays and bureaucracy, create delays
and costs for SMEs that have a tangible impact
on their ability to grow. While larger companies
can mitigate risk across dozens of sites in some
cases, small firms encountering delays on one or
two sites will be the difference between a year
of growth and a year of contraction.
Whilst large sites are extremely efficient in their delivery
in strong market areas, small sites are consistently
efficient across all areas. But pressures on local
Government finance and the political rationale employed
by councils when establishing its five-year land supply
mean that a growing number of housing allocations are
for very large sites out of the reach of local companies.
The average permissioned housing scheme has
increased in size by 17% in less than a decade. Thus,
today the number of units granted planning permission is
higher than in 2007 but the number of sites permissioned
in the year to June 2016 was still some way short. In many
cases the local planning authority’s five-year land supply
is highly theoretical and a greater diversity of sites would
help achieve housing requirements more effectively. Even
when a headline planning consent can be obtained on
suitably sized sites, the process for progressing the site
through the remaining planning and legal obstacles can
lead to extensive delays.
To address these problems we propose:
• Altering the definition of a small site: Various
measures and policies exempt small sites – usually
defined as being around the 10 unit mark – from
certain red tape. This creates an arbitrarily defined
incentive to focus development on certain sizes of
schemes. Increasing to 20 dwellings would remove this
disincentive to growth and broaden the potential site
base for SMEs.
• Introducing a presumption in favour of
residential development on appropriate
brownfield sites: Rather than a continued reliance
on public sector-led solutions through Brownfield
Registers, or overly restrictive planning use
regulation, a presumption in favour of brownfield
development within settlement boundaries would
free up private builders to seek out suitable sites and
bring them forward for housing with some degree of
confidence that they will receive planning permission.
Within the bounds of our plan-led planning system
this would help to reinvigorate entrepreneurialism.
• Increasing the ‘buffer’ required in Five Year Land
Supplies: Local Plans effectively set an upper limit
on housing supply in an area through five-year land
supplies (in those areas where local authorities have
a plan). By planning for a ‘buffer’ of 20% additional
dwellings over and above the minimum it is far more
likely that housing need will be met.
• Planning for a wider range of sites within local plans:
A greater variety of sites, including more small sites
within local plans will help support SME consolidation
and growth and speed up housing supply.