Size Matters (2025)

Introduction

In the 1980s, small and medium sized housebuilders (SMEs) built almost 40% of the UK’s homes. In 2025, they built only 9%. This decline not only reduces the current capacity to build more social and affordable homes, train the workforce of tomorrow, and meet our climate targets, but it hinders organic placemaking, while also making the construction industry less stable.

Planning risk remains the biggest barrier to SMEs (building up to 250 homes a year), not just because getting planning permission is increasingly costly and bureaucratic, but because local plans do not support the sites they typically deliver. Planning reforms may not apply to them and sites of ten, fifty, one hundred, and one-thousand homes experience similar scrutiny.

Recommendation

This must change, and therefore we propose changing the current site definition of Minor (1 to 10 homes) and Major (10+homes) to the following.

• Minor: 1 to 9 homes
• Medium: 10 to 49 homes
• Large: 50 to 100 homes
• Major: 101 to 249 homes
• Strategic: 250+ homes

Reasoning

Replacing the two arbitrary site size definitions implemented in 1995 and introducing new ones based on impacts makes the planning system more proportionate and strategic.

Local authorities already implement similar thresholds in recognition of commercial challenges. The housebuilding industry strongly supports them and they create a mechanism for the Government to better target support for the key players delivering growth.

Our ‘Size Matters’ document explores the above in greater detail, highlights where alignments already exists, how things have changed, and why five site size thresholds are so important to sustainable growth. These recommendations ensure that the planning system is fit for purpose and can deliver for people, places and builders, especially SMEs.