Pocket Living tells government to create Homes England SME managers under plan to 鈥榮ave鈥� smaller housebuilding sector
Pocket Living has proposed the government establish up to 25 Homes England SME manager roles to help small and medium-sized housebuilders deliver more homes.
These managers would 鈥減rovide dedicated support, acting as a single point of contact for SMEs, ensuring clarity and efficiency in the funding process, working together to find solutions with a new Homes England tool kit鈥�.
The report also recommends that there should be a metric within Homes England鈥檚 annual performance review that requires at least 15% of housing delivery to come from SMEs.
Published today, Pocket Living鈥檚 report titled 鈥楪et SMEs 好色先生TV Again鈥� outlines a 10-point plan to 鈥渟ave鈥� the SME housebuilding sector and has been endorsed by various major developers and trade bodies.
These include Barratt Developments, Berkeley Group, British Land, Clarion Housing Group, National Federation of Builders, Peabody, Southern Housing, and others.
It suggests implementing a quota of allocations for local SMEs in local plans, to ensure they continue to play a role in the housing market.
Another recommendation is that Homes England should launch an initiative offering platform-level equity investment to SMEs, using a custom set of standards to assess cost factors and risk profiles for these developers.
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These recommendations come at a time when 鈥渢he situation facing SME housebuilders is increasingly grim and has never been worse鈥�, according to Pocket Living.
There are fewer than 2,500 SME homebuilders operating in the country, down from over 12,000 in the late 1980s, according to a Home Builders Federation report published in 2017.
SMEs are responsible for only 10% of the UK鈥檚 housing output, a significant drop from the 1960s and 70s when they delivered nearly 50% of new homes.
According to the report, in London, the number of SMEs has fallen by 66% over the last two decades.
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To deliver an extra 50,000 brownfield homes per year, the report estimates that more than 拢60bn in additional capital needs to be invested in the delivery of new homes.
To fund this, the report advocates for reforming tax to allow full expensing of build costs for new homes when the money is spent, rather than when they are finally sold.
By allowing immediate expensing, this reform would foster competition and support SMEs, who often face higher financing costs.
In terms of planning reforms, the report recommends implementing a presumption in favour of development for small brownfield sites in paragraph 70 of the National Planning Policy Framework.
The report also suggests adopting New Zealand鈥檚 approach to planning, which would involve referring only the largest planning applications and making the process less political by including experts on the panel.
To make use of the 300,000 unused small sites across England and Wales, Pocket Living says there should be a national public land portal specifically for small sites aimed at SMEs.
Marc Vlessing, founder and chair, Pocket Living, said: 鈥淓ver since I co-founded and led Pocket 20 years ago, Labour has had a strong history of supporting small businesses in the UK. Their manifesto today promises to make small businesses 鈥榯he beating heart of our economy.鈥�
鈥淪o it鈥檚 time to use their substantial majority, heed the sector鈥檚 calls and implement these ten policy proposals, which are designed to be cost-neutral for the Treasury and should be low-hanging fruit for the Chancellor.鈥�
Paul Rickard, managing director of Pocket Living, said: 鈥淎s a sector, we are staring down the barrel of extinction, and it鈥檚 time for the government to take action before it鈥檚 too late.
He added that 鈥渨ithout a flourishing SME housebuilding sector, there is no way the government will deliver on its promise of 1.5 million homes by the end of this term.鈥�
David Thomas, chief executive of Barratt Developments, said: 鈥淲e welcome this report and its recommendations which are a positive and creative addition to the debate on housing policy. SMEs are vital to housing delivery, and we鈥檇 encourage the Government to look at ways they can be supported alongside other providers in the sector.鈥�
The full 10-point plan in Pocket Living鈥檚 report:
- Empowering Homes England - Create up to 25 new bespoke Homes England SME Managers and include a metric within Homes England鈥檚 annual performance review requiring at least 15% of housing delivery to come from SMEs
- Finish Tax Reform to Drive Investment into New Brownfield Homes - Reform tax to allow full expensing of build costs for new homes when the money is spent, rather than when they are finally sold
- Small Sites Planning Policy - Unlock the delivery of thousands of homes through minor tweaks to Para 70 in the NPPF, allowing for a presumption in favour of development for small brownfield sites
- Small, but Perfectly Formed - Deliver suburban design guides to offer greater certainty, potentially unlocking 900,000 homes within a 10-minute walk from major train stations in London alone
- Implement a National Public Land Portal for Small Sites - Councils across England and Wales possess over 300,000 unused small sites. A national public land portal dedicated to small sites for SMEs could facilitate their development
- Implementing Quotas for SME Housebuilders in the Local Plan Process - Implement a quota of allocations per local plan for local SMEs to ensure they continue to play a role in the housing market
- Exploring the Kiwi Approach to Planning Committee Procedures - Draw upon New Zealand鈥檚 approach by reforming the committee process so only the largest applications are referred and depoliticise the process by including experts on the panel
- Helping People on and Up the Housing Ladder - Refine the national housebuilding target to provide for a minimum of 10% as specialist housing for older people and offer greater certainty through a presumption in favour of specialist housing on small sides
- Creating Certainty for Planning Decisions Through a Chief Planner 鈥� Encourage Local Planning Authorities to employ a Chief Planning Officer responsible for ensuring decisions align with the adopted and up-to-date Local Plan
- The Growing Challenge of Rights of Light - Right of Light liabilities can reach upwards of 拢1.5 million for a 100-home scheme. The government should encourage all local authorities to use pre-existing statutory powers under s.203 to ensure small sites remain viable
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