What the government’s new housebuilding reforms mean for small business owners

In a bid to tackle the UK’s housing shortage and revive the role of smaller developers, the government has announced a major overhaul of planning rules, land access, and funding support for SME housebuilders. 

The reforms aim to strip back bureaucracy, speed up development on small and medium sites, and channel fresh investment into local firms, with the ultimate goal of delivering 1.5 million new homes while simultaneously driving regional growth and job creation.

Here’s what you need to know.

The challenge: Big rules, small builders

Right now, smaller developers face the same planning and regulatory hurdles as large-scale housebuilders. That means a small project of just ten homes can get bogged down in the same bureaucracy as a 100-home development, which can leave SME builders sidelined.

This has taken a toll on market share. Back in the 1980s, SME builders were responsible for 40% of all new homes. Today, that figure is dramatically lower. The government’s new reforms aim to reverse this trend by levelling the playing field.

What’s changing, and why it matters for SMEs

Simpler planning for smaller sites

• Developments of up to nine homes will benefit from streamlined planning rules and eased biodiversity net gain (BNG) requirements.

• Expert planning officers — not committees — will make faster decisions, cutting wait times and boosting certainty.

A new category for medium sites

• Projects between 10 and 49 homes will now face fewer costs and simpler regulation.

• These sites will be exempt from the Building Safety Levy and benefit from more straightforward BNG rules.

More access to land and finance

• Homes England will release more land exclusively for SMEs.

• A new National Housing Delivery Fund (to be confirmed at the Spending Review) will provide long-term finance options, including revolving credit facilities and innovative lending alliances.

Pilot scheme to unlock small plots

• A new Small Sites Aggregator pilot will bring together small brownfield sites and attract private investment, turning unused land into viable, community-focused housing developments.

• The model is based on Lloyds Banking Group’s Social Housing Initiative and will be trialled in Bristol, Sheffield, and Lewisham.

Planning committees overhaul

• Minor and technical applications will be handled by trained officers rather than elected committees.

• This will speed up the process, reduce costs, and get projects moving faster.

Funding boosts to help you build

As part of the wider support package, the government is also going to inject £100 million into SME Accelerator Loans, aimed at helping smaller construction firms that often struggle to secure finance from traditional lenders. This funding forms part of a broader £700 million extension to the Home Building Fund. 

Councils will also receive a £10 million boost to hire more planning specialists, accelerating vital environmental assessments and helping to get projects off the ground faster. 

Meanwhile, a £1.2 million PropTech Innovation Fund will back the development of new technologies designed to streamline small site delivery — such as advanced data tools that can assess future infrastructure capacity and improve the case for investment.

Jobs, training and the bigger picture

While the reforms focus on boosting housebuilding, their potential impact stretches far beyond the construction site. For small business owners across sectors, this could mean new opportunities for growth.

SME builders already play a critical role in training the next generation of workers, accounting for eight in 10 construction apprentices. With the government pledging to train up to 120,000 new apprentices as part of its broader “Plan for Change,” small firms will gain access to a growing pool of skilled labour, not just in construction, but in related trades and services too.

More housebuilding means more local people in work, more spending power, and more demand for nearby businesses. From plumbers and materials suppliers to local cafés, convenience stores, and accountants, a ramp-up in housing can kick-start entire local economies. For SMEs, especially those in areas slated for development, this could be a chance to win new business, hire more staff, and become part of a long-term growth cycle.

What it means for you

For SME housebuilders, the message is clear: less red tape, more access to land and funding, and quicker routes to development. For other small businesses, the prospect of faster housebuilding and new communities popping up across the UK could mean more customers, more jobs, and more stability.

With the government backing SMEs to “get Britain building,” now could be the time to lay the foundations for your next stage of growth.