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SME housebuilders need early-stage funding to unlock green social housing

SME housebuilders need early-stage funding to unlock green social housing

1st December 2021

The number one risk in many recent industry surveys has been the slow delivery of implementable planning permissions. And whilst this has a clear impact on the delivery of homes and the growing gap between the number of completions and government targets, there are other hidden consequences which are clearly affecting the delivery of green housing argues Richard Clarke, Head of Land and Planning at Autograph Homes.

One of the knock-on impacts has been with funding, particularly for SME housebuilders, who are eager to get on and build homes, have a track record in low carbon thinking, but repeatedly face obstacles to delivery. Most normal funding routes only release finance from receipt of detailed planning and therein lies the problem. The cost of funding planning and over such long timescales is impacting cashflow. In the housing sector, the main focus has been around the need for more homes and the move towards Off Site Manufacture and Modern Methods of Construction. In order for these homes to get built, both need planning permissions. Of course, whilst Off Site Manufacture may indeed provide reduced time and therefore cost once on site, it does nothing to speed up the need for planning permission.  Increased delays prior to starting work on site are having a major impact on cashflow and hence reducing the number SME developers can fund in their pipeline of schemes. 

A substantial amount of new build social housing is coming through S.106 agreements, and by far the biggest share of this comes from volume housebuilders using their standard catalogue units. With more Registered Providers looking to move towards Net Zero, they are increasingly looking to the SME sector to provide bespoke, higher standards for sustainable homes. Here at Autograph Homes, we have Registered Providers queuing at our door for our recognised EPC A-Rated homes. We provide a full ‘turn-key’ service from site finding, through planning and then build. We go out of our way to incorporate the latest low carbon thinking into our new builds.  Yet it is the impact of the huge delay in planning that is holding back delivery volume. There are waits of 11 months for a pre-app response, over two years for a planning application and 15 weeks to get materials approved. 

With their ability to be swift of foot, innovative in design thinking, small volume house builders lead the way in sustainable builds, often accessing small inner-city sites where others fear to tread. The English planning system, despite its reforms, is causing delay upon delay across the country for small developments. The system is stacked against the SME. Has the time come for financial investment to be provided at an early stage via facility to carry the volume of these units through the morass of planning and delivery? Early stage-funding would undoubtedly allow small volume housebuilders to sustain the long planning delays and start to unlock green development.

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