What the Latest Planning Reforms Really Mean for SME House-Builders and Developers

Successive governments have promised to fix the planning system. This latest round of reform may help SME house-builders and developers, but only if it delivers better decisions, greater certainty and a more proportionate approach to smaller sites.

This post is aimed primarily at SME house-builders and property developers, although many of the same issues will also be relevant to wider property businesses.

Changes to the planning system are nothing new. They come round with reassuring regularity, each accompanied by the familiar promise that this latest package will make planning simpler, faster and more effective. I have seen a good many of them since first qualifying in 1982. The present round of reform did not appear overnight either. It has been building across governments of different political colours and has gathered real momentum since around 2020, as successive administrations have tried to address one stubborn problem: the persistent under-delivery of housing.

Against that background, the current reforms are worth careful attention. Their broad intention is clear enough: to speed up delivery, reduce delay and make the planning system more effective in supporting new homes and infrastructure. That is, in principle, welcome. For those operating in the SME end of the market, delay is not a minor irritation; it is often the difference between a viable scheme and one that never gets off the ground. Smaller and medium-sized developers, and many broader property businesses, are usually more exposed to prolonged decision-making periods, inconsistent decision-making, and rising holding costs than the larger players.

One of the more important changes is the move towards greater local control over planning fees. That may mean higher costs in some areas, which will not be greeted with enthusiasm. Even so, there is a practical point here that should not be ignored. Planning departments in many councils have been under-resourced for years, and applicants have felt the effects through delay, patchy communication and inconsistent case handling. If higher fees genuinely lead to better-staffed departments and more reliable service, many in the industry may conclude that paying a little more is preferable to losing months of uncertainty.

The proposed changes to the NPPF are also significant because they reflect a clearer focus on small and medium sites. The draft framework introduces a new category of “medium development” for schemes of 10 to 49 homes on sites up to 2.5 hectares, and it pushes local plans towards greater provision on smaller sites. That matters. For a long time, the system has tended to favour those with the land bank, patience, and resources to pursue large strategic opportunities; the reality is that these large sites take a significant period of time to deliver. A more deliberate shift towards smaller and medium-sized sites could create better openings for SME house-builders and developers, who are often more agile, quicker to build out and more willing to tackle awkward or overlooked land.

Biodiversity Net Gain is another area where the reforms may prove particularly important. Recent official announcements indicate it will be introduced in July 2026. The introduction of a 0.2-hectare exemption for smaller sites, together with wider proposals intended to make the regime more proportionate, may remove some of the burden that has fallen heavily on modest schemes. That could improve viability in cases where costs and complexity have become disproportionate to the scale of development. Even so, nobody should assume that ecology drops out of the picture. Protected species, habitat value and local environmental sensitivities will still require proper attention, and rightly so.

Perhaps the clearest practical message, however, comes from the changes to the appeal process. The direction of travel is unmistakable: get it right first time. If appeals are to be dealt with more quickly and with less scope for introducing substantial new material later, then the quality of the original submission becomes even more important. That means better preparation at the outset, stronger planning statements, sound technical input and a realistic understanding of policy and local issues before the application goes in. That may increase upfront costs, but it should also reward those who approach the process properly rather than treating appeal as a second chance.

My own view is that these reforms could be helpful, but not because they will somehow make planning easy. From past experience, they will not. What they may do is make the system a little more predictable, a little more proportionate for smaller sites, and perhaps a little better resourced. For capable SME operators, that could make a real difference. But the essentials remain much the same as they have always been: sensible site selection, realistic appraisals, good professional advice and a clear understanding of how local authorities are likely to view a proposal in practice. In planning, that is still what separates a promising site from a deliverable one.