09 Jul 2025
As the professional body for people who work or have an interest in housing we welcome the opportunity to respond to MHCLG’s Planning Reform Working Paper: Reforming Site Thresholds. We have focussed on questions related to our remit as the professional body for housing, responding in detail to questions one, seven, 10 and 13.
Yes.
We support the government’s commitment to supporting small and medium builders (SMEs) through the proposals in this working paper. Research has shown the value of SME housebuilders, with specialist skills to help tackle trickier sites, strong local relationships, and commitment to supporting local communities by meeting local housing needs. We have a desperate need for more genuinely affordable housing, and to meet the government’s 1.5 million homes target, we must ensure that all housebuilders are supported to boost development and deliver the homes we need. Further views are outlined in our response to the Planning Reform Working Paper: Speeding Up Build Out.
Our members have reflected views that a medium-sized site threshold would help to reduce barriers and accelerate delivery for SMEs, alongside other measures to support SMEs, further outlined in question 13. However, it is important to note that these changes would not help to boost the delivery of sites in rural areas, which are often on rural exception sites of more than ten dwellings, which experience similar delays, risks and costs as smaller rural exception sites. Thus, we would support calls for rural exception sites of ten to twenty dwellings to be included in the Minor Development Classification. Further details on reforms needed for rural housing and other points on thresholds can be found in our National Planning Policy Framework (NPPF) response, linked below.
See research: LSE, Supporting SME Housebuilders: Challenges and Opportunities, Nov 2024. https://www.lse.ac.uk/geography-and-environment/research/lse-london/documents/Reports/Supporting-SME-Housebuilders-nov24-A5-proof4.pdf
See CIH response to the NPPF: https://www.cih.org/publications/cih-submission-to-the-consultation-on-proposed-reforms-to-the-national-planning-policy-framework/
Not applicable.
Not applicable.
As noted in our response to the NPPF (linked below), we support calls from rural housing colleagues for thresholds for affordable housing delivery to include sites of less than ten dwellings in parishes fewer than 3,000 population. Changing policy to allow these contributions to be secured would in addition reduce the cost of sites and sales of the affordable homes and guarantee a cashflow for SME builders.
See CIH response to the NPPF: https://www.cih.org/publications/cih-submission-to-the-consultation-on-proposed-reforms-to-the-national-planning-policy-framework/
At CIH, we have been working with our members and sector partners to determine the current barriers in the Section 106 process, which may disrupt the delivery of affordable housing (nearly half of affordable homes have been delivered through Section 106 in recent years, according to the UK Housing Review). Whilst there are difficulties for all parties in the process (with our members outlining the “perfect storm” of issues), there are specific concerns for SMEs. Section 106 agreements are often resource-intensive and require legal expertise for complex negotiations on financial viability. This often means the process favours large developers, who have the resource and skills that both local authorities and SME developers do not have. This means Section 106 agreements can be difficult to secure for smaller sites, as SMEs are often the housebuilders best equipped to deliver on these smaller developments, but have the above barriers to operating in the Section 106 process effectively.
There have been a range of proposals for improving the Section 106 process, including guidelines outlined by the G15 and L&Q (link below). From our member engagement, it is clear that the most effective way to improve the Section 106 process is for early engagement between local authorities, developers and housing associations, to establish clear expectations and develop relationships for future development initiatives. This would favour SMEs as they often have strong existing relationships with local partners and communities. However, this would also require additional support for SMEs to compete within the Section 106 market, as further outlined in question 13.
See G15 and L&Q guidelines: https://g15.london/news/g15-publishes-guidance-for-developers-on-s106
Not applicable.
Not applicable.
As a broader point, it is important to note the significant factors impacting upon development in recent years, and where further support is needed to boost the delivery of affordable housing. Research by LSE (linked below) outlines some of the barriers for SMEs, including the planning system, land market, insufficient access to finance, labour availability and the cost of materials. This follows wider financial and political uncertainty in the housing and construction sectors, as constant policy changes and external shocks (such as interest rate changes and supply chain disruptions) have impacted upon the speed and ability to develop. These pressures are particularly acute for SMEs, who do not have access to the resources or support of the larger housebuilders, and are outlined in HBF’s SME: State of Play report (linked below).
We welcome the government’s recent introduction of the Small Sites Aggregator initiative, to address concerns about unlocking small sites for development. One of our members outlined that they focus their work on underused parcels of land that are often overlooked, but can be some of the quickest to complete in local partnership. These initiatives have been historically under-supported, but the Small Sites Aggregator initiative shows that, with the right support, these small sites can unlock significant social value and contribute to tackling local housing needs, in which SME housebuilders can play a significant role.
See research: LSE, Supporting SME Housebuilders: Challenges and Opportunities, Nov 2024. https://www.lse.ac.uk/geography-and-environment/research/lse-london/documents/Reports/Supporting-SME-Housebuilders-nov24-A5-proof4.pdf
See report: HBF, SME: State of Play report, December 2024. https://www.hbf.co.uk/news/hbf-report-state-play-challenges-and-opportunities-facing-sme-home-builders/
For more details on the policy paper visit the government's website.
If you'd like more information on our response please contact Megan Hinch, policy manager, megan.hinch@cih.org