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The government is exploring plans to relax the rules for smaller building companies bidding to develop new sites across England, as it seeks to boost supply of houses amid a growing affordability crisis.
Labour’s housing secretary Angela Rayner released a set of proposals on Tuesday that would make it easier for small and medium-sized housebuilding businesses to get permission for construction from local authorities.
The proposed reforms would exempt smaller housebuilders from some environmental controls as well as the safety levy introduced in the aftermath of the Grenfell Tower fire to fund repairs of outdated and dangerous features in some UK buildings.
The working paper, to be released in full on Wednesday, is part of a wider drive by the Labour government to build 1.5mn new homes in England by 2029, in response to a housing affordability crisis that has priced many Britons out of the market.
“We’re taking urgent action to make the system simpler, fairer and more cost effective, so smaller housebuilders can play a crucial role in our journey to get Britain building,” said Rayner.
Planning reforms introduced by the government over the past year will result in 305,000 new homes a year being built by 2029, according to independent forecasts by the Office for Budget Responsibility released in March.
However, the fiscal watchdog also warned that the figure is still off the official target.
Under the proposals, smaller developers would be allocated more than £100mn access to help them access loans and invest in new technologies for speeding up their projects.
Rayner also suggested offloading some decisions regarding smaller development projects to specialist planning experts, as opposed to locally elected councillors who would focus on bigger builds.
The industry welcomed the proposals, with Home Builders Federation executive director Steve Turner saying that “the increasing complexity of the planning system has meant that smaller developers struggle to get sites done in a realistic timeframe”.
Small and medium-sized developers — which used to account for 40 per cent of the country’s homes in the 1980s — have seen their market share shrink rapidly in recent decades, as they struggle to keep up with new building regulations at the same pace as major housebuilders.
But Turner said the reforms will have little effect if government ministers fail to address “the lack of affordable mortgage lending, in particular for first time buyers”, which he said was the core reason behind lags in the housing supply.
The lack of accessible lending options for homebuyers “makes it more difficult for the industry to invest with confidence into new sites”, added Turner.
The Financial Conduct Authority said earlier this year it was looking into ways to bolster mortgage lending, including by lowering the stress testing requirements for customers, as the regulator responded to the government’s call for more pro-growth measures.
