The UK government has unveiled a sweeping set of housing reforms aimed at unlocking small-scale developments and reinvigorating the role of small and medium-sized (SME) housebuilders. Central to the plan is a £100 million loan fund, supported by changes to planning rules, land availability, and funding access — all designed to accelerate housing delivery and support regional economies.
The reforms are part of a broader £700 million expansion of the Home Building Fund and form a key part of the government’s pledge to deliver 1.5 million new homes. Officials say the measures will not only address the housing shortage but also spark job creation and investment in local communities.
Small and medium developers have long faced the same regulatory hurdles as large firms, with many deterred by red tape and costly delays. This has seen their market share fall sharply — from building 40% of homes in the 1980s to a much smaller portion today.
To reverse that trend, the government is simplifying the planning process for developments of up to nine homes. These projects will now be assessed more quickly by trained planning officers, rather than elected planning committees, and will be subject to lighter environmental requirements. Medium-sized schemes — up to 49 homes — will also benefit from regulatory relief, including exemptions from the Building Safety Levy.
A new £100 million SME Accelerator Loan scheme will provide construction firms with better access to capital, while Homes England is expected to release more public land specifically for SME-led development. New finance options, including revolving credit facilities and partnerships with alternative lenders, are also planned under a proposed National Housing Delivery Fund.
A pilot programme to identify and bundle small brownfield plots — called the Small Sites Aggregator — will launch in Bristol, Sheffield, and Lewisham. Councils will receive £10 million to hire more planning specialists and speed up environmental assessments. An additional £1.2 million will be invested in digital tools through the PropTech Innovation Fund.
Joe Phelan, business loans expert at money.co.uk, said the reforms mark a turning point for smaller firms. “The government’s new reforms aim to reverse the decades-long decline in SME housebuilding,” he said. “But their impact could be even broader — helping to revive local economies and create new opportunities for small businesses of all kinds.”
Beyond the construction sector, the reforms are expected to benefit a wide range of local businesses, from tradespeople and suppliers to cafés and retailers. SME builders also play a critical role in workforce development, accounting for roughly 80% of construction apprenticeships. The government says the housing push could support up to 120,000 new apprenticeships.
With quicker approvals, better land access, and targeted financial support, ministers hope SMEs will lead the next phase of Britain’s housebuilding agenda — and help bring wider economic renewal to towns and cities across the country.
