Following 探花直播's听 hosting the 17th Housing Summit at , we asked Michael Parinchy, Senior Construction Manager at , to write a blog on the challenges facing SMEs in the听UK housebuilding industry.听The blog follows on from one听Michael wrote a year ago, in this update he asks what鈥檚 really changed for SMEs?
Twelve months ago, I argued that our industry could be 鈥渟truggling and exciting鈥� at the same time. That still feels true鈥攂ut the balance has shifted. Politically, momentum is finally behind building again. The government has reaffirmed the ambition for 1.5 million homes this Parliament and begun reshaping policy to make that plausible. For SMEs, that creates opportunity鈥攂ut only if reforms bite where delivery actually happens: local plans, small-site allocation, and day-to-day casework.
Policy tailwinds鈥攏ow turn them into permissions
The National Planning Policy Framework was revised, reinstating tougher housing expectations and introducing concepts like prioritising lower-quality 鈥済rey belt鈥� land. For SME builders, the signal matters: local plans are expected to meet need again, and authorities have clearer cover to allocate deliverable sites. The test for the next year is whether timetables accelerate and plans genuinely earmark parcels under 50 homes where SMEs excel.
Alongside that, ministers are preparing further measures to speed decision-making on housing and infrastructure鈥攃urbing delays, tightening judicial review windows, and letting central government intervene where projects stall. If enacted with care, those powers could unclog strategic bottlenecks and reduce the four-year odysseys that spook funders and sap SME cashflow. But they must cascade into simpler, faster routes for minor applications too, not just headline schemes.
Costs up, capacity still thin
Here鈥檚 the rub: application fees have risen (35% for majors, 25% for others) and will now index annually, yet many planning departments remain understaffed and overwhelmed. SMEs have paid more for the same鈥攕ometimes slower鈥攕ervice. We鈥檒l support higher fees if (and only if) they are ring-fenced for case officer capacity, digital systems, and statutory decision deadlines with consequences.
On infrastructure funding, the picture is mixed. Freedom of Information work last year suggested large sums of Section 106 cash were sitting unspent in council accounts. Whether you think that鈥檚 caution or inertia, stagnant money means delays in occupations and choked SME cash cycles. Transparent dashboards and time-limited 鈥渦se it or explain鈥� rules would help turn obligations into action.
SMEs remain the missing middle
Parliament acknowledged years ago that SME housebuilders have collapsed from roughly 39% of output in the late 1980s to around a tenth today. That hasn鈥檛 reversed yet. The CMA鈥檚 2024 market study also underlined how a sluggish, complex planning system entrenches scale and deters challengers. If we want more beautiful streets in market towns and city infills that respect grain and character, we must back the firms who specialise in them.
What鈥檚 working鈥攁nd what to copy at scale
There鈥檚 real progress in modern methods, net-zero ready fabric, and smarter heat systems; SME sites remain living labs for these. University partnerships, pattern books, and energy-performance assurance are becoming mainstream. Where councils proactively 鈥減arcel up鈥� large allocations into serviced small plots鈥攕ometimes with a design code and utility spines鈥擲ME delivery follows. Replicate that across local plans and you multiply capacity without waiting on a single mega-site to move.
Five practical fixes for the next 12 months
- Require a meaningful share of housing numbers on sub-50-home sites, with clear phasing and infrastructure triggers.
- Use public-private vehicles to forward-fund utilities and access so SMEs can build, not chase wayleaves for a year.
- If an authority misses the clock without agreeing an extension, part of the fee is automatically rebated.
- Mandate uniform digital validation lists, standardised conditions, and dashboards so applicants see where items are stuck.
- Keep affordability ambitions high, but calibrate S106/CIL so viability on smaller schemes isn鈥檛 torpedoed by one-size-fits-all asks.
Outlook
I鈥檓 more optimistic than last year because policy is finally getting attention. But optimism doesn鈥檛 pour foundations. Give SMEs predictable rules, serviceable plots, and planning decisions in months not years, and we鈥檒l deliver the variety, speed and quality the 1.5-million target needs. The cranes will follow鈥攂ut so will the cottage-scale scaffolds that stitch new homes into real places. That鈥檚 the bit only SMEs can do at scale, if we鈥檙e allowed to get on with it.
Are you a developer or housing provider? 探花直播鈥檚 Centre for Future Homes helps organisations explore robust, scalable and sustainable solutions to general housing issues using the latest academic research. Through using evaluating models and design tools, the Centre provides sustainable and cost-effective solutions.
This blog represents the view of ProBuild360, not BCU.
