The UK property development landscape is undergoing a quiet revolution. While media headlines often focus on interest rates and house prices, a more transformative shift is taking place in the background: planning reform. For small and medium-sized developers and self-builders, recent and upcoming changes in planning policy are poised to unlock new opportunities.
From the introduction of a proposed “medium-site” category to the rollout of land release initiatives, the planning environment is being recalibrated to support more agile and community-focused development. For SME developers, this could mean quicker permissions, fewer regulatory burdens, and new financing models. For self-builders, it may finally be the moment to break through the red tape and start building.
In this article, we explore the key reforms, their impact, and how Cator Wells clients can position themselves to capitalise on this moment of policy-driven change.
The Case for Change: Why the Planning System Is Being Reformed
The UK’s housing crisis is well documented. The government’s longstanding target to deliver 300,000 new homes per year has repeatedly been missed, due in no small part to an outdated and overburdened planning system.
Key issues include:
- Delays in local authority decision-making
- Cumbersome environmental assessments
- Limited access to development land for small builders
- Underfunded planning departments with staff shortages
Small and medium developers account for just 12% of new homes built annually in the UK, down from over 40% in the 1980s. Central government has acknowledged that the system, as it stands, favours large volume housebuilders with in-house planning and legal teams. The reforms now being proposed aim to level the playing field.
The Medium-Site Revolution
One of the most significant changes on the horizon is the creation of a “medium-site” category within planning policy. This applies to schemes of between 10 and 49 units and is designed to:
- Fast-track approvals via local development orders (LDOs)
- Reduce the scope of environmental assessments
- Offer exemptions from the Building Safety Levy
- Allow simplified viability assessments
The rationale is that medium sites are large enough to make a meaningful contribution to housing supply, but small enough to avoid the complexities of major schemes. These are exactly the type of developments SME builders typically pursue.
A proposed National Development Management Policy (NDMP) will also include a presumption in favour of approval for medium-sized sites, provided they meet basic design and environmental standards.
If adopted, this could significantly reduce planning risk and bring forward thousands of currently stalled or marginal sites across suburban and semi-rural areas.
Self-Builders: The Quiet Beneficiaries
Self-builders often face similar frustrations to SME developers: excessive delays, ambiguous local policies, and inconsistent interpretation of national guidance.
Under the Self-Build and Custom Housebuilding Act, local authorities are required to maintain a register of individuals and groups seeking to build their own homes. However, compliance and enforcement have been weak.
Recent guidance from the Department for Levelling Up, Housing and Communities (DLUHC) aims to strengthen these provisions by:
- Introducing financial penalties for councils that fail to process applications in a timely manner
- Encouraging proactive land identification for self-build plots
- Promoting model policies and design codes to streamline approvals
Some councils are already trialling designated Self-Build Zones, with simplified application processes and pre-agreed design standards. Cator Wells is actively supporting clients exploring finance for these sites in Kent, Devon, and parts of Yorkshire.
Strategic Land Release and Funding Support
The government has committed over £1.2 billion in land assembly and enabling infrastructure funding to accelerate housing delivery. Key initiatives include:
- The Brownfield Land Release Fund (BLRF): Targeted at unlocking publicly-owned brownfield land for SME-led development.
- The Local Authority Accelerated Construction Programme: Providing planning and design support to councils to speed up development on surplus land.
- Development Corporations and Land Aggregators: Public-private models being used in Greater Manchester, Tees Valley, and the West Midlands to unlock strategic housing zones.
In parallel, Homes England is expanding its support for SME builders with new routes to funding:
- Development Finance Guarantees: Reducing risk for lenders financing small schemes
- Equity Partnerships: Co-investment models for developers with planning-secured land
- Infrastructure Loans: To fund utilities, access roads, and site remediation
These tools make sites that would previously be unviable or too capital-intensive now accessible to smaller developers.
Leasehold and Rental Reform: Opportunities and Caution
While planning reforms are broadly positive for small developers, other legislative changes may create new compliance requirements:
Leasehold and Freehold Reform Act 2024
- Bans on new leasehold houses
- Caps on ground rent for flats
- Standardised enfranchisement processes
For developers building flats or converting commercial properties, this reduces potential income streams from ground rents and service charge uplifts, but may improve saleability.
Renters’ Rights Bill (expected 2025)
- Abolition of Section 21 (no-fault) evictions
- Mandatory minimum energy efficiency standards
- Expansion of tenant rights and rent review controls
For those pivoting to build-to-rent or PRS models, it’s vital to ensure compliance and work with lenders that understand the new legal environment.
Cator Wells has already begun mapping lender appetite for PRS lending under the new framework and advising clients on structuring leases, energy upgrades, and tenancy models.
Market Demand and Buyer Behaviour
Despite broader economic uncertainty, demand for new housing remains robust, particularly in:
- Regional cities and commuter belts
- Energy-efficient and smart homes
- Co-living, retirement, and wellness-focused housing
First-time buyers and downsizers remain key demographics, and both value efficient layouts, affordability, and predictable running costs.
For developers, this means:
- Focus on EPC ratings, smart heating systems, and broadband-ready units
- Maximising usable internal area without excessive floorplans
- Designing for remote work, car-light lifestyles, and multi-generational living
Planning reform should make it easier to design and deliver homes that meet these needs without being dragged through years of bureaucracy.
What Developers Should Do Now
To capitalise on the changes:
- Map sites that fit the medium-site definition: Between 10–49 units, ideally in areas with local plan shortfalls
- Engage early with planning consultants: Especially those experienced in local development orders and NDMPs
- Join or monitor self-build registers: Some councils offer early access or grants for registered parties
- Pre-plan exit finance: If you can build faster, you need finance that matches your build speed
- Engage with land aggregators and Homes England: Many smaller sites are being bundled and funded via partnership models
Cator Wells is actively helping clients identify suitable land, connect with experienced planning advisers, and secure finance that allows them to move quickly when planning approvals are granted.
To find out how we can support your next project, speak to the Cator Wells team today.