Group of MPs backs call to exempt SME housebuilders from regulations

A group of MPs and industry leaders have backed calls to to accelerate housing delivery in England by reducing regulations for SME housebuilders. 

The nine-point plan, drawn up developer Pocket Living, outlines steps to reduce red tape for small and medium housebuilders through targeted exemptions from requirements such as biodiversity net gain and Section 106. (See box of recommendations below.)

It is backed by MPs on the all-party parliamentary group (APPG) for SME housebuilders.

Sarah Edwards, chair of the APPG, said: “Across the country, underused sites and empty shops blight our communities, yet SME housebuilders have the flexibility to transform these spaces where large developers won’t. This new report shows that these builders face disproportionate costs, stifling their contribution. We must support them to revitalise neglected areas and deliver the homes our communities so badly need.”

The recommendations come after a report by the Home Builders Federation published earlier this week warned housing development has taken a nosedive in London recent years. It revealed that planning permissions in London having dropped to their lowest level since records began in 2006, with just 966 projects approved in the 12 months to June 2025.

Pocket Living’s new report called “The Road to a Proportionate System”, argues that its plan could “drastically cut costs for SMEs overnight”, who currently face an average £60,000 higher cost building a home for a first-time buyer in high demand areas like London compared with larger PLC developers.

It also emphasises that SMEs are ideally placed to bring forward smaller individual schemes, where consented schemes by volume builders are more likely to face lengthy delays from the Building Safety Regulator while being dependent on strong sales pipelines.

Paul Rickard, chief executive of Pocket Living, said: “With the volume builders struggling to deliver the homes we need due a combination of regulatory delays and a softening sales climate for large-phase developments, in part driven by the dearth of support for first-time buyers, there is a golden opportunity for SMEs to step in and take up the slack. Our nine-point plan would unlock a wave of sector growth not seen since the 1970s, reversing decades of decline and unlocking the full potential of SME-led delivery.”

Contributors to the report include Nicholas Boys Smith, former chair of the government’s office for place; Jack Airey, former No.10 special advisor on housing; Suzanne Revell, group sales and marketing director of Churchill Living; and Russell Curtis, founding director of RCKa.