Government slashes red tape to tackle housing crisis
The government will slash red tape to get more construction by smaller building firms off the ground, and to “get working people on the housing ladder,” Deputy Prime Minister Angela Rayner has said as Labour looks to promote its pro-business credentials.
A relaxation of environmental protections is expected, including Biodiversity Net Gain (BNG) requirements which seek to leave wildlife habitats in better condition than they were found before building around them.
The government has earmarked £10m this next year towards helping councils accelerate environmental assessments by hiring specialists.
The Ministry of Housing is also considering exemptions to the Building Safety Levy (BSL), which was introduced after the Grenfell Tower tragedy in order to raise revenue to make buildings safer, and is planned to come into effect in the Autumn of 2026.
Smaller developments – between ten to 49 homes – will benefit most from the BNG and BSL exemptions. The government will also be releasing land for the exclusive use of small and medium sized builders to support their competitiveness.
The stripping back of red tape is designed to speed up home building and deal with the UK’s housing scarcity, which has helped push rent and property prices up to alpine heights. The average rent in England increased by 8.6 per cent – to £1,301 – in 2024.
“Large housing sites, producing over 2,000 homes, can take at least 14 years to build, meaning working families and young people spend years deprived of homeownership or the ability to rent an affordable home,” the Housing Ministry said earlier this week.
Further funding will also follow these regulatory changes; the upcoming spending review is anticipated to include a new home delivery fund. This is in addition to £100m in SME Accelerator Loans aimed at the growth of smaller firms.
Rayner, in her lesser-known capacity as Housing Secretary, trailed this announcement earlier this morning, writing that “today we’re taking urgent action to make the system simpler, fairer and more cost effective, so smaller housebuilders can play a crucial role in our plan to build 1.5 million homes.”
“Smaller firms, which provide local jobs and train eight out of 10 construction apprentices, have seen their market share shrink since the 1980s, when SME builders delivered 40% of the country’s homes,” Rayner said.
Green vs growth?
The proposals are likely to attract pushback from the “bats and newts” lobby, which calls for growth which does not infringe on environmental protections.
Labour MP Clive Lewis said: “Biodiversity Net Gain? Slashed … It’s austerity, privatisation and inequality dragging the economy down – yet it’s our natural environment that’s being mullered to pay for it.”
Environmental activists have issued a warning around the neglect of green standards.
Paul de Zylva, senior sustainability analyst at Friends of the Earth, said: “When the UK is already one of the most nature-depleted countries in the world, how does the government expect it to recover if all developments aren’t required to play their full part?
“Instead of acting as a cash-for-nature scheme as it does in its current form, ministers must mould the Planning and Infrastructure Bill into the ‘win-win’ for both nature and development they claim it to be,” de Zylva added.
However, Melanie Leech, chief executive of the British Property Federation (BPF) – representing the UK real estate industry – says that the moves are a promising move towards getting 1.5m new homes by 2029, and will revitalise the construction industry.
The BPF are particularly supportive of the exemptions to BNG requirements and the BSL. “We recognise the importance of funding for building safety and biodiversity standards – but know that the cumulative impact of the various charges imposed on new developments is creating a viability crisis,” Leech said.
The payoff
This follows an announcement from the Ministry of Housing earlier this week requiring housebuilders to commit to delivery deadlines before they can receive planning permission, and keep local councils abreast of developments on an annual basis.
The Office for Budget Responsibility said the government’s July 2024 plan to implement housing targets for councils and free up green belt land on construction could result in 1.3m new homes being built in England in the next five years.
This means houses could be built at the fastest rate in 40 years, and could lead to a boost in the economy to the tune of £6.8bn, according to the Ministry of Housing.