--- title: "The planning revolution: what SME developers need to know right now" description: Labour's planning reforms create new opportunities for SME developers. Small sites get priority, but new costs emerge. 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That's about to change.   Labour's launched the most comprehensive planning reform since the 1990s, and for once, smaller developers are in the crosshairs—in a good way. They've committed to building 1.5 million homes in five years and designed specific reforms to help SMEs compete against the big players.   The reforms are already hitting. December 2024 NPPF changes are live, planning fees doubled in April, and the Planning and Infrastructure Bill is racing through Parliament.   Here's what's actually happening—and what you need to do about it.   **What's changed already**   Housing targets are now mandatory. Gone are advisory targets councils could ignore. Labour's introduced mandatory housing targets with serious consequences for councils that don't deliver. This creates predictable demand and reduces the risk of authorities blocking viable schemes.   "Grey belt" is officially available. The December 2024 NPPF formally recognised "grey belt"—lower-quality Green Belt land near transport links. These sites are now explicitly available for development, subject to a 15% premium above local affordable housing policies (capped at 50% maximum).   Planning fees have doubled. Householder application fees jumped 104% in April 2025—from £258 to £528. All planning fees now rise annually with inflation, capped at 10% per year.   Planning committees are being sidelined. Applications that comply with local development plans bypass planning committees entirely, going straight to planning officers. For SMEs, building relationships with planning officers becomes critical.   **What's coming**   - June 2025: Local plan submission deadline under current system approaches - 2026: Planning and Infrastructure Bill implementation begins. Building Safety Levy starts (applies to developments of 10+ units) - TBC 2025: Future Homes Standard implementing 75-80% carbon reduction Infrastructure levy simplification promised. The government will replace CIL and Section 106 with a single infrastructure levy calculated as percentage of sale value. But detailed regulations still aren't published.   **The real opportunities for SME developers**   Small sites get policy priority. The NPPF requires local plans to allocate at least 10% of housing on sites of 1 hectare or less. Sites under 10 units remain exempt from affordable housing contributions.   Brownfield gets explicit priority. There's now a presumption that brownfield applications "should be approved unless substantial harm would be caused." If you can identify viable brownfield sites with transport links, you're playing with the system rather than against it.   Permitted development rights expanded. Agricultural conversions under Class Q now permit up to 10 dwellings (up from 5). Class R commercial conversions allow up to 1,000sqm (doubled from 500sqm).   £100 million SME fund is available. The government's launched £100 million in accelerator loans specifically for SME developers, plus £10 million to help councils hire environmental specialists.   Small Sites Aggregator Pilot showing promise. Bristol, Sheffield, and Lewisham are piloting aggregation of brownfield sites for 5-15 homes. If successful, this could transform small site development nationwide.   **The challenges you can't ignore**   Biodiversity Net Gain is expensive. You need 10% biodiversity improvement on every site, maintained for 30 years. BNG offset payments typically cost £15,000-25,000 per biodiversity unit—factor this into land appraisals from day one. Most SMEs lack internal expertise and will need specialist ecological consultants.   Regional performance creates a postcode lottery. 51% of SMEs wait over a year for planning permission, but this masks huge geographic differences. Some councils are efficient, others are basket cases. Research local authority performance before committing to sites—it directly affects your cashflow and project viability.   Technical standards keep rising. The days of "standard" housebuilding are over. Future carbon requirements, building safety regulations, and environmental compliance create a complex web of technical requirements that many SMEs aren't equipped to handle.   **Your action plan**   Target small brownfield sites near transport. These tick every government priority box and benefit from streamlined processes. Avoid sites requiring affordable housing unless you're confident in viability.   Build planning officer relationships. Officers matter more than councillors now. Invest time understanding their priorities and constraints in your target authorities.   Get serious about environmental compliance. Either develop internal BNG expertise or establish partnerships with established ecological consultants. Don't leave this to the last minute—environmental compliance issues can kill deals.   Research local authority performance. Planning determination times vary from 8 weeks to 18+ months depending on the council. Factor this into your cashflow planning and site selection strategy.   **What this means for your next deal**   - Land appraisals must include BNG costs (get ecological assessment early to understand exposure) - Planning fees are now 5-10% higher and rising annually - Small brownfield sites have policy wind behind them—premium pricing may be justified - Local authority performance directly affects project viability—due diligence on council efficiency is now critical **Looking forward**   These reforms represent a genuine shift towards supporting SME developers, but success depends on adapting quickly to new requirements. The sweet spot is increasingly clear: small brownfield sites with strong transport links and compliant environmental assessments.   For development finance, this changing landscape means environmental compliance and local authority performance become critical factors in project assessment. Schemes that align with government priorities should find stronger policy support, but the technical and cost complexities require more sophisticated project evaluation.   The planning system is finally moving in SME developers' favour. Time to make sure you're positioned to take advantage. [Written by Shojin](https://www.shojin.co.uk/insights/author/shojin) Published 27 June 2025 Back to top![](https://www.shojin.co.uk/hubfs/shojin/icons/backto-top.png) Subscribe to newsletter Subscribe to receive the latest Shojin insights and resources to your inbox every week. #### Share this post - [![](https://www.shojin.co.uk/hubfs/shojin/icons/share-linkedin.svg)](http://www.linkedin.com/shareArticle?mini=true&url=https://www.shojin.co.uk/insights/the-planning-revolution-what-sme-developers-need-to-know-right-now) - [![](https://www.shojin.co.uk/hubfs/shojin/icons/share-facebook.svg)](https://www.facebook.com/sharer/sharer.php?u=https://www.shojin.co.uk/insights/the-planning-revolution-what-sme-developers-need-to-know-right-now) - [![](https://www.shojin.co.uk/hubfs/shojin/icons/share-twitter.svg)](http://twitter.com/intent/tweet?text=https://www.shojin.co.uk/insights/the-planning-revolution-what-sme-developers-need-to-know-right-now) - [![](https://www.shojin.co.uk/hubfs/shojin/icons/share-email.svg)](mailto:?subject=https://www.shojin.co.uk/insights/the-planning-revolution-what-sme-developers-need-to-know-right-now&body=https://www.shojin.co.uk/insights/the-planning-revolution-what-sme-developers-need-to-know-right-now) More in this series ## Similar insights you might like [View all](https://www.shojin.co.uk/insights) [![](https://www.shojin.co.uk/hs-fs/hubfs/Blog/2025/08%20August/Four%20factors%20for%20developers/josh-olalde-X1P1_EDNnok-unsplash.jpg?width=352&name=josh-olalde-X1P1_EDNnok-unsplash.jpg)](https://www.shojin.co.uk/insights/four-cost-increases-hitting-sme-developer-margins) [Special reports](https://www.shojin.co.uk/insights/tag/special-reports), [Blog](https://www.shojin.co.uk/insights/tag/blog) ### [Four cost increases hitting SME developer margins](https://www.shojin.co.uk/insights/four-cost-increases-hitting-sme-developer-margins) If you're a developer using pre-2024 cost assumptions, your margins are under pressure. 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The risks involved will vary by project types, so please make sure you have read and understood the specific risks associated with the investment. Investments made on this website should only be made as part of a diversified investment portfolio. For more details, see the Key Risks. Projections or estimated returns are not a reliable indicator of actual future performance and eventual returns or dividends may be lower than predicted. Information presented on this website is for guidance purposes only and does not constitute financial advice. If you are unsure of the suitability of an investment, please contact your financial adviser for professional advice. Shojin is a trading name of Shojin Financial Services Limited. This website is a financial promotion approved by Shojin Financial Services Limited which is authorised and regulated by the Financial Conduct Authority (FRN: 716765) (see [www.fca.org.uk/register](https://www.fca.org.uk/firms/financial-services-register) for more information). Companies that issue investments on this platform, including bonds issued by Shojin entities, are not themselves regulated by the Financial Conduct Authority and investments made on this site are not covered by the Financial Services Compensation Scheme. The investment opportunities listed on this website are not offers to the public and can only be entered into by certain types of investors who have satisfied certain investment criteria. 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