Construction industry heavyweights have thrown their weight behind proposals to exempt medium-sized home schemes from the Building Safety Levy (BSL).
Housing secretary Steve Reed (pictured) on Tuesday (16 December) announced a raft of changes to the National Planning Policy Framework (NPPF), including an exemption from the levy for sites of fewer than 50 homes.
Industry figures welcomed the proposals, after warning for years that the levy – due to be introduced later this year – would disproportionately affect smaller housebuilders and could lead to a reduction in housing delivery.
Brian Berry, chief executive of the Federation of Master Builders (FMB), said the proposed reforms were “a positive push in the right direction” to give smaller developers a larger foothold in the housing market and would “help SMEs grow their businesses”.
The proposals – which will now be consulted on – would introduce an exemption from the BSL for sites of between 10 and 49 homes.
The draft policy’s inclusion is a victory for the National Federation of Builders (NFB), which has lobbied hard on the proposal in recent months.
Rico Wojtulewicz, head of policy and market insight at the NFB, said: “This NPPF review gives us an opportunity to realign the planning cogs and make planning policy more predictable and coherent.
“As contributing authors to the ‘Identifying Land’ section in the NPPF, it also offers us an opportunity to advise the government on how it can do more to help SMEs, while pushing for our medium-sized site proposal to be front and centre of their thinking.”
The levy, set to come in on 1 October 2026, will act as a tax on new developments to fund the removal of unsafe cladding on buildings of 11-18 metres where the developer cannot be traced or has to agree to cover the costs upfront.
Previously, the Ministry for Housing, Communities and Local Government (MHCLG) said the levy could raise £5.1bn for remediation work.
The MHCLG said in the consultation document that the upper limit of 49 homes was “appropriate” due to the majority of those schemes being delivered by SMEs.
It said that many of the responses to an initial consultation on the medium sites policy were supportive of the change.
However, some raised concerns it could impact on the availability of building safety remediation funding and/or the pace of works.
Some councils warned they mainly have sites of fewer than 50 homes, meaning they could face levy deficits if the new rule came into effect.
Swift bricks and heritage sites
MHCLG’s proposals also included a requirement for swift bricks in new developments, as well as rule changes on the redevelopment of heritage sites.
Swift bricks are hollow bricks designed to provide nesting sites for cavity nesting birds.
On heritage assets, MHCLG said respondents to the working paper were “concerned” that there was too much focus on harm and not enough “positive support for the sustainable redevelopment of heritage assets to support growth” – particularly for heritage buildings in disrepair.
They said developments at heritage buildings had become “a regular ground for legal challenge” thanks to complicated planning and heritage rules. MHCLG has now proposed explicit policies on the approach to developing world heritage sites and conservation areas, to reduce the number of legal challenges.
MHCLG will also consult on its default ‘yes’ for projects around train stations, which it proposed last month. It has also proposed minimum dwelling densities around train stations to “maximis[e] opportunities for sustainable development”.
It proposed minimum densities of 40 dwellings per hectare around all stations, and 50 dwellings per hectare around well-connected stations.
Biodiversity net gain
In the new year, MHCLG will release details on “easements and exemptions for different categories of site” relating to biodiversity net gain (BNG), which compels developers to increase the natural habitat around their sites by 10 per cent.
In a release accompanying the consultation, it said developers warned the “system needs to work better for some of the smallest developments”, with particular challenges on brownfield sites.
The government said it would propose exemptions for sites of up to 0.2 hectares, and will consult on exemptions for brownfield sites of up to 2.5 hectares.
Wojtulewicz said: “The reforms announced on BNG are welcomed and will help small projects, but the policy is still broken. For as long as it remains based on broad habitats and not ecosystems, it will continue to make projects unviable, while not doing enough for wildlife.”
Heather Lindley-Clapp, a director at planning consultancy Nexus Planning, said that, from a regeneration perspective, one of the most significant reforms is the introduction of a permanent presumption in favour of suitably located development within settlements, unless harms would substantially outweigh benefits.
“This effectively creates a default ‘yes’ for brownfield development,” she said.
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Joshua Stein