Research commissioned by the Land, Planning and Development Federation (LPDF) and United Trust Bank (UTB), and conducted by planning and development consultancy Lichfields, shows that the time taken for SMEs to achieve an outline planning permission has increased significantly from around 13-14 weeks in the 1990s to a whole year in 2023.

The research also shows that the costs SMEs are facing have been rising substantially, with a typical planning permission costing £12,000 (£28,000 in today’s money) in the 1990s, compared to the £125,000 it costs to obtain an outline permission today. That is nearly 4.5 times the 1990s cost in real terms.

SME builders are a vital element in providing diversity in the housing markets and help local businesses to provide the homes needed in local areas – but their numbers are falling. SME builders represented 39% of our housing delivery in 1988, but represented only 10% in 2020.

UTB believes that the government’s most recently appointed Housing Minister, Lee Rowley MP, will come under pressure from the housebuilding industry to do more to address the issue.

The report, ‘Small builders, big burdens’ – which can be downloaded free of charge here – makes a series of recommendations to reduce the burden placed on SME housebuilders including:

• Requirements for outline planning permissions being simplified and scaled back commensurate with the ‘principle of development’.
• Local planning authorities looking to allocate more land suitable for development by SMEs.
• Reducing or eliminating fees for smaller sites (of between 10 and 100 units).

Adam Bovingdon (pictured), head of property development, United Trust Bank, said: “UTB is committed to supporting SME housebuilders with our funding supporting the creation of around 7000 new homes at any one time. We are pleased to have the opportunity to support this important study which highlights the huge burden the UK’s dysfunctional planning system places on housebuilders and most particularly small and medium sized operations which find it much more difficult to employ the economies of scale available to larger businesses.

“Lenders like UTB are queueing up to provide experienced housebuilders and developers with the money they need to create the many thousands of homes we need to build each year. Establishing a planning system which is fit for purpose should be one of the main priorities of this government and the next.”

Paul Brocklehurst, chairman of the LPDF, added: “SME housebuilders are the lifeblood of our industry but they are finding it harder and harder to deliver the homes that this country so desperately needs. This new research shows how we have gone backwards over the last 30 years in terms of the time and the money it takes SMEs to get planning permission. No wonder they’re collapsing in number.

“Without action from the government to help SME housebuilders and a more proportionate approach I fear we will only see further decline.”