Ravi Pankhania, managing director of Nacropolis Group, explores the challenges surrounding affordability, supply shortages, and planning complexities in the UK housing market
Today, Britain finds itself at a crossroads concerning its housing challenges, grappling with affordability, supply shortages and intricate planning challenges.
Many ideas are circulating among politicians, academics, think tanks, and developers, such as myself, on tackling these critical issues.
However, one consideration that is often overlooked is the role that small developers can play in improving the UK housing market.
Expert ideas for reform of the housing market
Reform of the planning system is often raised as a key aspect of delivering more housing, but the truth is that Britain’s planning system has fundamentally remained unchanged since 1947.
To accelerate housebuilding efforts, some argue the cumbersome planning process should be streamlined and red tape removed so that housebuilders can see an improvement in the UK housing market.
Many in the industry are frustrated by the delays caused by the current system. The layers of bureaucracy and protracted decision-making often act as a bottleneck, impeding the timely delivery of much-needed housing projects.
To address these issues, some experts argue that moving away from the discretionary case-by-case systems is needed to turn towards a flexible zoning system, automatically granting planning permission for planning proposals that comply with a zone-based local plan.
This could streamline the planning approval process and speed up decision-making, which is much needed, considering only 15% of major decisions are approved within the 13-week deadline, if granted.
Could small developers be the answer to the UK’s housing woes?
While reforming the planning system is important, another avenue that could help alleviate the UK’s housing crisis is the resurgence of small property developers.
Historically, small-scale developers played a significant role in the housing market, often building homes tailored to local needs and communities.
However, in recent decades, larger developers have dominated the landscape, leading to a lack of diversity in housing supply.
Community engagement is recognised as a crucial element in the planning process, and many experts advocate for its central role. However, reality often reveals a disconnect between communities and new developments.
Community objections and resistance to projects frequently surface in numerous planning applications.
These significantly slow down the rate at which projects can be completed and, in some cases, halt the process altogether. This indicates that more must be done to effectively harness community consultations on new developments.
SME developers recognise the value of engaging residents when building new homes and actively work with the community throughout the planning process.
For instance, the community consultation we held last month on a new residential project in Bushey Heath, Hertsmere, was well-attended and a great opportunity for us to hear and respond to the ideas, suggestions and concerns from those who know the area best; local residents.
Currently, the UK relies on 11 private developers to build more than two-fifths of new homes, and they largely focus on nationwide targets. In comparison, SME developers are often embedded within their community making them best placed to assess local needs.
Supporting SME housebuilders presents a more effective way for communities to express their opinions and integrate their input into new developments.
This engagement allows communities to help shape the development agenda, fostering the creation of better-designed spaces that resonate with community needs and aspirations. In turn, communities are less likely to object to projects they helped shape.
Some 30 years ago, small and medium-sized enterprise (SME) house builders were the backbone of the UK’s housing industry, accounting for a substantial 40% of new builds.
However, these numbers have fallen to a mere 12% over the years.
This significant decline marks a profound shift in the housing market dynamics, with larger developers increasingly dominating.
The dwindling presence of SME housebuilders has had far-reaching consequences. It has reduced the diversity of housing stock, as large developers often prioritise standardised designs and mass production.
Subsequently, the availability of bespoke housing options tailored to the specific preferences of the local community has declined.
An SME developer’s view
Having grown up in the areas where I build, I am strongly interested in the general quality of life in my local community. Their needs are at the heart of our developments. Many SME developers would say the same.
As such, we ensure that the housing designs and strategies we use in our projects meet the diverse and unique needs of local communities while addressing environmental and urban challenges.
We have found that multi-use properties work well to accommodate the needs of local communities. Set against the limitations of traditional single-purpose developments, multi-use properties offer a better solution by integrating residential, commercial, and recreational spaces within the same building or complex.
Whilst maximising land efficiency, this strategy fosters vibrant, mixed-use neighbourhoods that promote social interaction and economic vitality and address the community’s concern that new developments will result in a loss of amenities for the neighbourhood.
SME developers are also often more inclined to invest in innovative and sustainable building practices while supporting local initiatives and cultivating better communities. Additionally, their projects tend to be smaller in scale, targeting the exact needs of the area at the time and making use of infill development opportunities.
While the more prominent property developers have a clear role in improving the quality and quantity of UK housing, SME developers are vital. They offer a more local perspective that helps ensure that the houses that are built are actually those that communities want.
