Encouraging small site development

Brian Berry explains how planning reforms could improve on the current lack of available small sites, while speeding up housing delivery.

I’ve written about the importance of a reinvigorated small and medium-sized (SME) housebuilding sector to the overall health of our industry a number of times in this column. More than anything else, this will require many more opportunities for smaller scale development than the market and the planning system currently tend to allow.

The lack of available and viable small sites is seriously constraining the growth of SME builders. The results of the FMB House Builders’ Survey 2017, the only annual snapshot of SME housebuilders in England, show that nearly two-thirds of SMEs think that the lack of available and viable land is a major barrier to their ability to increase output. This was the most commonly-cited barrier for SMEs for the third year in a row and, worryingly, over half of SMEs said that they believe the number of available small sites is actually decreasing.

There are issues in the planning system which clearly need to be addressed if we are to encourage more small site development. For starters, there is a tendency for local plans to be overwhelmingly focused on identifying and allocating larger, strategic sites. Indeed, this may be the most significant factor behind the perceived scarcity of small site opportunities. As such, the proposal in the Government’s Housing White Paper that a certain percentage of sites, or even (as the FMB has argued for) a certain proportion of housing delivery, allocated in a local plan be given over to sites of less than half a hectare could be the most important planning reform for small scale developers in recent times.

There could also be a positive role to play here for the sometimes-maligned neighbourhood planning regime. Anecdotal evidence suggests that neighbourhood plans tend to be more likely to allocate small sites over large sites, but the FMB believes that the potential for this must be more clearly highlighted within, and built into, the process of neighbourhood planning. FMB members suggest that they would be generally keen to engage with neighbourhood planning groups to discuss potential opportunities. As such, we could suggest that a call to locally-based housebuilders for sites should be part of the official guidance on neighbourhood planning.

A lot more opportunities for small builders would be created if the Government goes ahead with other proposals in its Housing White Paper, which would allow for more natural growth of villages. Small sites in good locations for housing in and around villages allow for the sustainable growth of these villages. Yet, these sites are typically ignored by local authorities, which often seem to favour larger sites that may require less resources and cause less of a political headache (per unit) than several smaller sites.

Though resistance to development in small villages can be strong, given the choice, local residents would often prefer the development of a number of smaller sites to the imposition of much larger developments. Allowing this choice to be presented more clearly could help achieve preferred outcomes all around.

The findings of the FMB House Builders’ Survey 2017 demonstrate how crucial it is that the Government now acts on its own proposals to drive an increase in opportunities for small site development and greater participation in the market by smaller firms.

For all the reasons outlined above, the Housing White Paper was a step in the right direction in this regard. The document rightly highlights the need to diversify the housebuilding sector so that it is less reliant on a select few large housebuilders. In order to do this, we need the Government to commit to its proposals. The Government must now take these steps to alleviate the barriers facing SME builders and begin to improve the availability of, and speed up the planning process for, small sites.