A potential delivery gap for mid-sized schemes
We welcome the Government’s commitment to support SME housebuilders – particularly the proposal to exempt schemes of 50 homes or fewer from the new build-out measures. However, this exemption could inadvertently create a delivery gap for sites between 50 and 100 homes.
Large PLC housebuilders typically focus on schemes of 100 + homes, while SMEs play a crucial role in delivering mid-sized developments. A threshold set at 50 units may discourage SMEs from pursuing slightly larger projects – potentially leaving the 50-100 unit space underserved. Adjustments may be needed to ensure housing delivery is supported across all site sizes.
Don’t overlook the role of land promoters
Research by Lichfields, commissioned by the Land Promoters and Developers Federation, shows that around 50% of all outline planning applications are secured by land promoters who don’t build homes themselves.
If penalties for slow build-out are introduced, it becomes even more critical that permissions granted are genuinely deliverable. With the number of consents likely to rise in the next few years, landowners are already prioritising exit strategies and delivery credibility when selecting development partners, a trend only likely to grow if these measures are introduced.
Delays are often systemic, not strategic
As the Government acknowledges in its consultation, sites often get ‘stuck’ due to the lengthy S106 negotiations, infrastructure delivery, utilities provision and environmental factors which all need to be addressed.
It’s also important to recognise that land promotion agreements often require additional time after planning permission is granted. This may involve negotiating a purchase price under an option agreement or marketing the site and completing a sale to a housebuilder under a promotion agreement. These processes are essential and can be lengthy, particularly in complex or uncertain market conditions.
Supporting demand is key
The Government is taking positive steps by recognising that accelerating housing delivery hinges on increasing absorption rates—primarily by boosting demand for both market-sale and affordable homes and promoting greater tenure diversity.
As my colleague, Neil Kelly, puts it, ‘builders won’t build if they can’t sell’. The proposal to make the Mortgage Guarantee Scheme permanent is a welcome move, but additional demand-side support—akin to the former Help to Buy scheme—should also be explored.
Equally important, is the need to stimulate demand from housing associations for S106 homes. A lack of interest from these providers is currently preventing many consented sites from progressing to delivery.
Mixed tenure development is already gaining momentum with major housebuilders increasingly adopting partnership models that include affordable, private and Build-to-Rent (BTR) tenures. Demand for single-family BTR homes remains strong, with institutional investors actively pursuing forward-funding deals and bulk purchases.
At Bidwells, we’ve long advised landowners on the benefits and complexities of multiple tenure strategies. Tenure diversity can support delivery but requires careful planning, especially around phasing and infrastructure. For instance, BTR and later living schemes often need upfront delivery of amenities to make them viable.
A balanced policy approach is needed
We welcome the Government’s ongoing commitment to planning reform and accelerating housing delivery. However, while it considers introducing penalties for slow build-out rates, it is crucial to take a more comprehensive view of the underlying challenges.
These include genuine issues around housing demand—both private and affordable—as well as systemic delays such as prolonged Section 106 negotiations, infrastructure constraints, and complex post-consent procedures.
As ever, the finer points will be crucial. Housebuilders operate commercially, and if there’s a perceived risk of being held accountable for delays beyond their control, it’s likely this will be priced into their models. The knock-on effect may be a softening of land values - which could, albeit unintentionally, discourage landowners from bringing sites forward for development — potentially constraining rather than supporting housing delivery in the long term.
A balanced, evidence-based policy approach is crucial to encourage landowners, developers, and local authorities to work together toward the common goal of improving both the speed and quality of housing delivery across the UK.
