Prioritise smaller sites

Brian Berry, chief executive at the Federation of Master Builders (FMB), explores the upcoming planning reforms, and argues for a much higher focus on small sites.

The planning reforms that are due to be published “before the summer” as part of the new National Planning Policy Framework (NPPF) are fundamental to delivering the homes we need. It’s also central to ensuring that we get, as the politicians like to say, the right homes, of the right quality, built in the right places.

As part of the reforms, changes to the NPPF are expected to ensure that a suitable proportion of sites on which planned-for housing is deliv- ered are small sites of less than half a hectare. Currently, local plans and five-year land supplies tend to be overwhelmingly focused on larger strategic sites. As many housebuilders will be aware, the effect of this is that it tends to leave small and medium-sized (SME) firms largely reliant on bringing forward non-allocated sites, so-called windfall sites. This means SMEs have to deal with, at best, much greater uncertainty as to whether they are likely to get planning permission, and at worst the possibility these windfall applications will be seen as unwelcome additions to larger sites ear-marked in local plans.

Anecdotally, FMB members regularly say that they know of a number of small sites, which would be well-suited for the delivery of new homes, but local authorities appear uninterested, instead preferring to focus on delivering numbers almost entirely through a small number of large strategic sites.

We believe that this current situation is a major problem because it skews the development market by limiting the number of opportunities for SME housebuilders. There is no doubt that lack of small site opportunities is one of the most important, if not the most important, structural barrier to growth facing SME housebuilders. In recent years, the FMB’s House Builders Survey, an annual survey of SME housebuilders, has consistently shown lack of available and viable land as the most commonly-cited barrier to their ability to build more homes. Indeed, in the most recent survey 62 per cent of firms cited this as a major barrier. The impact is not just that it reduces competi- tion, diversity and resilience in the housing supply industry, but also that it slows down overall delivery of new homes. It concentrates delivery on larger sites which tend to get built out less quickly.

The draft NPPF states that “20 per cent of sites allocated in local plans to be sites of less than 0.5 hectares”. We believe that in order to have a truly significant impact in terms of increasing opportunities for small and medium-sized development, a small sites requirement must be defined in terms of overall housing provision rather than a percentage of allocated sites. Basing the requirement on housing delivery is how the proposal was set out in the 2017 Autumn Budget.

As well as this, the FMB believes that earmarking a small site as 0.5 hectares is too restrictive for local authorities and the SME housebuilding sector. The FMB maintains that the measurement should be changed to sites of 30 dwellings or fewer.

The benefits of looking to deliver a greater proportion of their housing targets through small sites for local authorities are plentiful. Generally speaking, having a larger number of small sites coming forward will speed up delivery. It should also, on average, provide a more consistent and reliable pace of delivery than relying on a handful of large sites. In the same way, it should also mean that local authorities’ five-year land supplies are at less risk and should decrease the likelihood of them failing the Housing Delivery Test. In addition, smaller scale developments are more likely to bring forward higher quality, and a wider, more innovative range of new housing. As part of this is more permissions for custom and self-build homes, which local authorities have obligations to deliver under the Self Build and Custom Housebuilding Act.

There can be little doubt that if we are to begin to build the number of new homes we need, then we desperately need to see a reinvigorated SME housebuilding sector and the use of more small sites for the delivery of new housing. We hope the new NPPF acknowledges this.