The Intermediary – June 2025 - Flipbook - Page 43
SPECIALIST FINANCE
Opinion
Government
proposals could
ease the path
I
f the UK is to meet its housing
targets, SME developers must
be able to operate in a market
that genuinely works for
them. The latest Government
proposals suggest this is now
beer recognised at policy level, and
that there is a growing understanding
of the barriers for smaller developers.
Deputy Prime Minister and
Housing Secretary Angela Rayner
has outlined reforms intended to give
small to medium (SME) developers
a clearer route to market. For those
grappling with planning delays,
restricted land access and tightening
funding conditions, these measures
could represent welcome progress.
The test will be whether they translate
into meaningful change.
A look at the proposals
One of the headline proposals is
to introduce a more streamlined
planning process for small sites,
with delegated officer decisions for
developments of up to nine properties.
This could help address one of the
most common frustrations for SME
developers: lengthy and unpredictable
planning delays that can hold up
otherwise viable schemes for months,
or even years. Faster decisions are
clearly welcome, though they will
only be effective if local planning
departments are properly resourced
and accountable.
The Government is also proposing
a new medium site category, covering
schemes of 10 to 49 properties. These
sites would benefit from simplified
biodiversity requirements and
exemption from the Building Safety
Levy, helping ease some of the cost and
viability pressures.
Beyond planning, the proposals
include steps to improve land access,
which has long been a major challenge
for SME developers.
Homes England is expected to
release more land specifically for
SME builders, supported by a new
National Housing Delivery Fund
to improve access to both land and
finance. In addition, a pilot Small
Sites Aggregator will look to combine
smaller brownfield plots that might
otherwise remain underutilised.
Realism on delivery
These are sensible proposals that
reflect many of the issues developers,
lenders and industry bodies have
raised in recent years. However, it is
important to be realistic about the pace
and impact of any reforms.
Planning remains highly
inconsistent across the country.
Some authorities are severely underresourced, with wide variations
in decision times and processes.
Delegated officer decisions for
smaller sites will help, but capacity
remains the critical constraint.
Without sufficient investment, even
well-intentioned reforms may not
shi the dial.
Land access is another key issue.
Smaller developers remain at a
disadvantage when competing with
larger builders that can afford to
land-bank. Releasing more land for
SME builders is positive, but the
mechanism will need to be carefully
managed to ensure genuine access and
opportunity.
Above all, SME developers need
certainty. They cannot plan their
businesses around future reforms or
untested pilots. They need to know
that the planning process will be
consistent and that funding will be
available when it is needed.
In the current market, access to
NEIL LEITCH
is managing director of
development finance at
Hampshire Trust Bank
funding remains as important as
access to land or planning consent.
Developers want lenders that can
offer consistency, flexibility and
real partnership.
Recent years have seen some
lenders become more cautious,
tightening criteria and reducing
leverage. Developers managing
multiple schemes need funding that
is pragmatic and aligned to how
they operate.
This is why we have focused on
increasing our ability to support
clients as they grow. We recently
raised our maximum lending to £35m
per borrower. We have also introduced
revolving credit facilities to give
experienced developers flexibility
across multiple projects.
Crucially, our funding is backed
by a strong savings base, not external
credit lines. In a market where
funding volatility remains a concern,
certainty is a key differentiator.
Looking ahead
The Government’s ambitions to
increase housing delivery are well
placed. SME developers must be
central to that effort. Planning
reforms and improved land access
are important steps, but they will
only translate into delivery if backed
by consistent, flexible funding and a
market that developers can rely on.
Certainty is the foundation that
enables developers to commit to new
schemes and invest in their businesses.
While policy may take time to evolve,
it is vital that lenders continue to
provide the stability and partnership
that SME developers need today. That
is where we remain firmly focused. ●
June 2025 | The Intermediary
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