We live in an exciting time of change when it comes to housing in the UK.

Things have not been great for a long time. We’ve not built 300,000 homes for over five decades and although it’s been a firm aspiration from successive governments for much of the 21st century, we’ve never gotten anywhere near that magic number.

Enter Starmer and his new Labour government. We’ve been promised change and an ambitious target of 1.5m homes in five years has been set.

The last time we built 300,000 homes was in 1969-1970. Way back when, SME developers are estimated to have built 40% of that stock. Fast forward to today and the estimated number has dwindled to as low as 10-12%.

An important discussion to have is, why have SME numbers fallen so far and what are the big challenges they face in delivering new housing stock? Another question more interesting still is, what can we do to help SMEs get back to their best?

The pertinence of these questions motivated us to put together a round table event to get the discussion started. Working with our friends at Place North West, we hand-selected a group of industry thought leaders from a variety of disciplines and sat down to discuss how SMEs can shape the future of housing and start developing with heart again.

This article is a round-up of the discussion, reflecting the direction of the conversation and some of the deep insights produced.

A massive thanks to Gilbanks for providing a fantastic venue and Place North West for helping us run this wonderful round table event. Most of all, we’d like to thank our participants for making it such a thought-provoking and motivating discussion. 

Those Attendees include:

Andrew Evans, Deputy CEO, VM Finance 

Phil Cooper, Director, Hope Architects 

George MacMillan, Partner, Kuits Solicitors 

Peter Jackson, Managing Director – Housing Partnerships & MEP/Renewable Energy, Seddon 

Michael Wedderburn, Construction & Development Director, Chambers Capital 

James Woodmansee, Director, PJ Livesey 

Gillian Worden, Director, Focus Planning 

Tess Cook, Director, RJP Town Planners 

Alex Maynard, Delivery Director, Greater Manchester Combined Authority

The planning process: A major barrier

As expected, when asked what the major barriers are to SME developers, the planning process was unanimously the number one on the list.

The inefficiency of the whole process has had a detrimental effect on SMEs. The planning timeline can stretch out for years because of bureaucratic delays, turnover of planning officers and inconsistent communications. All of these issues are worsened by local political dynamics and the tendency of planning staff to alter decisions made by their predecessors.

These long delays are a real problem for SMEs who often lack the financial resilience to endure the length of delays that result from the current planning system.

What’s worse, planning is often unpredictable and prevents SME developers from planning effectively. This unpredictability often sets in at the local level. What’s good and to brief in one borough might be completely wrong the next borough over. The obstacles could be completely different and require a completely different approach.

The consensus of the panel was that the system doesn’t necessarily lead to better outcomes. The tendency to try and revise and “improve” projects results in delays, stifles creativity and doesn’t always foster design that makes efficient use of land.

Doing what the big players can’t

Unlike volume house builders and large developers, SMEs can bring distinct advantages to the table that their bigger counterparts simply can’t. 

SME developers have the potential to offer greater variety and innovation in housing design, meeting the growing demand for smaller, community-oriented developments. Unlike the big players, SMEs are more likely to prioritise quality over quantity, creating developments that reflect local needs.

There is a market for home buyers looking for smaller developments that can offer community and individuality, all qualities that SMEs are in a better position to provide. 

Greasing the wheels: How we can support SMEs to have a bigger role in UK housing supply

For SMEs to get back to their best and realise their potential in the future of our housing industry, the system needs to offer support and predictability.

Pre-approved sites

One interesting idea is the notion of pre-approved sites. If local authorities earmark local sites for development and establish clear, consistent guidelines about exactly the kind of end product they want for the area, it would offer SMEs the certainty they need to proceed with confidence.

Another thread of the conversation was around developers with integrated business models. Those developers with construction arms and development arms can manage costs and timelines much more effectively. Newer entrants into the SME development space and non-integrated outfits won’t benefit from this. Pre-approved schemes would be a real boon for these SME developers.

Specialist SME teams at the local authority level

Some local authorities commit extra workload or even have specialist departments for large developments typically taken on by tier-one house builders. The thoughts here are that these authorities have got it the wrong way around. Large developers are resourced such that they don’t require extra support from authorities. They have the influence and the finances to get their projects across the line. Having extra local authority resources allocated to them is simply a “win more” scenario for them rather than one that levels the playing field equitably.

In contrast, SME-focused projects could really benefit from specialist teams within local authorities. With the ability of SMEs to develop community-focused, albeit smaller developments, there’s a real benefit to supporting them. However, they don’t have the heavy resources to weather roadblocks and planning quagmires like bigger developers, so a specialist team would be just the ticket in helping to bring SMEs back into the fold of UK housebuilding.

Developing with heart: Focusing on communities

Developing with heart was at the core of this round table discussion. With their ability to get into the details and meet the needs of the local community, SMEs can do this with aplomb.

In many ways, developing with heart isn’t about housing quotas. Yes, it’s important to meet the needs of the country by building enough homes, but it’s also about building homes that are good quality, affordable and community-focused. 

Instead of building vast generic housing estates (which there’s still a place for), SMEs can focus on delivering homes that reflect the aspirations of residents and foster a sense of belonging. 

SMEs can deliver projects that are not only functional but also deeply connected to the community. This kind of development prioritises quality of life, infrastructure, and long-term value for residents.

Town centres

Town centres have been in decline since the advent of the internet age. People simply aren’t going into town the way they used to. While there’s no one making an argument to completely gut all retail from smaller town centres, there are thousands of vacant retail units in towns and cities across the country in need of a new lease on life.

Many of these spaces offer prime opportunities that larger developers might overlook. SMEs can offer solutions that reinvigorate these communities, many of which are in dire need of rejuvenation. Maybe another reminder that it’s about more than building houses and more about creating places where people want to live, work and invest.

A call to action

The results from the round table discussion are clear. SMEs can have a powerful role in the new period of house building we hope will accompany the new Labour government.

The government have already established that things need to change and has started a public consultation to help inform the raft of changes they plan to enact. Here’s to hoping that they have something up their sleeves to ensure SMEs are brought back into the fold.

For it all to be a success we need:

• Effective planning reform including fewer delays and more predictability
• Policy frameworks
• Support structures
• Collaboration
• Appreciation for the benefits SME developers bring

If we can get all this right, not only can we make great strides toward the magic 300,000 homes per year Labour aspires to, but we can reap the benefits SME developers are ready and waiting to offer.

At the end of the day, people in the UK deserve homes that they’re proud of and communities they feel embraced by. 

Now is the time to start a new chapter and do better for everyone.