Government Unveils Bold New Backing for SME Builders to Get Britain Building

In a decisive move to accelerate house building, the government has announced a comprehensive package of reforms and financial support aimed at revitalising small and medium-sized enterprise (SME) builders. The new measures, detailed in the 28 May 2025 press release titled “Government backs SME builders to get Britain building”, aim to streamline planning for minor developments by easing regulatory requirements, introducing proposed exemptions, releasing land exclusively for SME use, piloting innovative schemes to unlock small sites and expanding access to financing options.

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Background: The Decline and Rebirth of SME Builders

Since the 1980s, SME builders have seen their share of the housing market shrink dramatically - from a healthy 40% to a fraction of that today. Burdened by a planning system that treats a 10-home development the same as one with 100 or more, small developers have been hampered by red tape, high costs and limited access to land and finance. Yet these same builders are essential to local economies, training 80% of the UK's construction apprentices and delivering vital local housing projects.

Deputy Prime Minister and Housing Secretary Angela Rayner made it clear that change is overdue:

“Smaller housebuilders must be the bedrock of our Plan for Change to build 1.5 million homes and fix the housing crisis we’ve inherited – and get working people on the housing ladder.  

For decades the status quo has failed them and it’s time to level the playing field”.

Key Proposals to Empower SME Builders

The government’s latest initiative introduces a series of reforms to level the playing field:

• Faster Planning for Minor Developments: developments of up to nine homes will benefit from simplified planning procedures and relaxed Biodiversity Net Gain (BNG) requirements. Decisions will be made by expert planning officers rather than full committees, speeding up the process.

• New “Medium Site” Category: sites with 10 to 49 homes will face reduced regulatory burdens. These include exemptions from the Building Safety Levy and streamlined BNG obligations, making it easier to build while preserving nature.

• Land and Finance Access: Homes England will release more land exclusively for SMEs. The forthcoming National Housing Delivery Fund, expected to be confirmed in the next spending review, will provide long-term finance tools such as revolving credit and lending alliances.

• Small Sites Aggregator Pilot: a new initiative to consolidate underused brownfield plots into viable development packages for SMEs. Inspired by Lloyds Banking Group’s Social Housing Initiative, the pilot will run in Bristol, Sheffield and the London Borough of Lewisham with backing from regional authorities.

Rayner emphasised the significance of the reforms, reinforcing that the government is “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”.

Boosting Financial Support and Innovation

To further bolster SME capabilities, the government has announced:

• £100 Million in SME Accelerator Loans: part of the £700 million expansion to the Home Building Fund, these loans will support growth and investment among small firms.

• £1.2 Million PropTech Innovation Fund: this fund aims to inject fresh technology into small site development. Solutions may include advanced data tools to help builders assess infrastructure capacity and support business cases for investment.

Conclusion: A Step Toward a More Balanced Housing Market?

This strategic support package signals a long-awaited shift in housing policy, recognising the vital role of SMEs in tackling the housing shortage, reviving local economies and modernising the construction industry.

As the reforms roll out, all eyes will be on local authorities and developers alike to turn this blueprint into bricks and mortar.

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Need help navigating the new reforms? At Bluestone Planning, we recognise the pivotal role these changes will play in shaping development opportunities. If you currently possess land and are uncertain about how to proceed in light of policy reform, we are here to help. Our team is ready to guide you through these new rules and help you make the most of the opportunities they present.

Contact us at Bluestone Planning by calling +44 1235 766825 or emailing admin@bluestoneplanning.co.uk.