Approvals for smallest sites halve, HBF report shows

Planning approvals on the smallest sites have halved as SME builders face planning delays and rising, according to a report by the Home Builders Federation (HBF).

The report by HBF and Quantum Development Finance points to figures showing 17,000 homes were approved on sites of three to nine units in 2024.

This compares to an average of 35,000 approvals a year in its Housing Pipeline Report.

The report said the proportion of planning` permissions granted on sites of 150 units or fewer has fallen from nearly 20% in 2008 to between 6% and 8% today.

HBF said that that planning delays, rising costs, and increasing regulatory complexity are combining to make many smaller schemes unviable.

The report looked at a sample of 60 developments in London. It said timescales facing planning applications for small sites are “unreasonable and unmanageable” with 94% of applications missing the statutory determination deadline.

It also said 13% of sites took over two years to secure permission and five schemes took over three years. Additionally, analysis of experiences across sites in various cities shows that small sites faced average planning fees and obligations of approximately £2m per site.

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The report makes several recommendations to government, including ensuring better resourcing for local planning authorities, more flexibility around section 106 agreements, the introduction of common adoptable standards for infrastructure and a fast-tracked scheme of delegation.

Neil Jefferson, chief executive at the Home Builders Federation, said: “While government wants to assist SMEs, the barriers our members are facing is substantial, and needs intervention to reverse the trends of declining small site approvals we are seeing.

“If we are to deliver new housing at the levels government is aspiring to, it is critical that developments and businesses of all sizes are supported and that SMEs are given the opportunity to grow.”