Creating opportunities for SME housebuilders.
Jonathan Witter MRICS, is the Development Monitoring Director at Assetz Capital.
Jonathan is a Chartered Surveyor with over 25 years’ experience. At Assetz Capital his focus is to advise on development monitoring, development finance, planning, and valuations on a national level.
In this short article, Jonathan shares his views on the recent changes to the National Planning Policy Framework (NPPF) and the opportunities that provides for SME housebuilders.
The UK’s planning policies play a crucial role in shaping urban and rural development. The recent updates to the National Planning Policy Framework (NPPF) introduce several key changes that impact Green Belt land, housing supply, and opportunities for small and medium enterprise (SME) developers. These updates aim to balance sustainable development with housing needs while maintaining the integrity of protected land. Let’s look at these in more detail.
Expanding Parameters: Defining Grey Belt Land
One of the most significant changes to the NPPF is the formal definition of Grey Belt land. This term refers to previously developed land (also known as Brownfield land) within the Green Belt. Unlike traditional Green Belt land, Grey Belt areas do not strongly contribute to the primary purposes of Green Belt preservation, and can be considered for development provided that this:
Prevents the unchecked sprawl of large urban areas.
Avoids the merging of neighbouring towns.
Preserves the unique setting and character of historic towns.
This reclassification allows underused Green Belt land to be repurposed for housing, providing new opportunities for sustainable urban expansion while maintaining the overall objectives of Green Belt policy.
Green Belt Boundary Reviews and Exceptional Circumstances
Another pivotal change in the NPPF is the possibility of reviewing Green Belt boundaries under exceptional circumstances. Previously, boundary revisions were rarely permitted. However, local planning authorities (LPAs) can now consider changes if they can fully justify and provide evidence that there is no alternative land to meet housing needs. The definition of ‘exceptional’ circumstances has been expanded to include situations where an LPA cannot meet housing development requirements in other locations.
A Tiered Approach to Meeting Housing Needs
To ensure sustainable planning, the NPPF introduces a tiered framework for addressing unmet housing needs. Before considering Green Belt land for development, the following must be evaluated:
Previously developed land in sustainable locations, such as disused industrial sites.
Other Green Belt locations identified in local plans that may be more suitable for development.
Remaining sustainable Green Belt locations that align with planning and sustainability objectives.
This structured approach prioritises development on land that least compromises the environmental and social value of the Green Belt.
Three Golden Rules for Green Belt Development
Where major development on Green Belt land is necessary, new planning rules (Paragraph 156) set out three key conditions:
A 50% cap on affordable housing, ensuring that at least half of the housing stock includes an appropriate proportion of social rented units, subject to viability.
Infrastructure improvements, ensuring that any new developments include necessary upgrades to local or national infrastructure to support increased housing demand.
Green space provisions, mandating that new or improved public green spaces be made accessible as part of the development.
These rules help ensure that when Green Belt land is used, it is done in a way that maximises social benefit while mitigating environmental impact.
Restoring the 5-Year Housing Land Supply (5-YHLS)
The 5-Year Housing Land Supply (5-YHLS) requirement has been reinstated. Before 2023, LPAs were required to maintain a rolling supply of deliverable sites to meet housing demand for the next five years. The reintroduction of this rule has several implications:
Increased Appeals – Developers may file more appeals to release land in areas where demand is high but the 5-YHLS is not demonstrated.
Pressure on Green Belt Land – If LPAs struggle to meet the 5-YHLS, there may be more applications to develop Green Belt land under ‘special circumstances.’
Prioritization of Brownfield Land – Disused industrial sites and previously developed land in sustainable locations are likely to receive more attention for development.
A Boost for SME Developers
The updated NPPF also includes specific measures to support SME developers, recognising their role in increasing housing supply and fostering economic growth. These measures include:
- Policy Improvements – Ensuring that 10% of small sites are allocated to SME developers.
- Streamlined Approvals – Planning committees are undergoing reforms to accelerate the approval process for small sites and mixed-use developments.
- Enhanced Application Tools – The use of ‘planning permission in principle’, Local Development Orders, and Brownfield Registers will help speed up application processes.
- Release of Grey Belt Sites – Greater opportunities for SMEs to develop infill sites and contribute to the broader housing pipeline.
- Greater Scrutiny on Housing Land Supply – The reinstatement of the 5-YHLS requirement means LPAs will need to ensure small sites are adequately included in planning strategies.
- Rural Development Opportunities – Expanded flexibility for community-led and affordable housing projects, including self-build initiatives.
- Larger Sites Split for SME Access – Encouraging LPAs to subdivide large developments to allow smaller firms to participate in new housing projects.
The updates to the NPPF represent a major shift in planning policy, balancing the need for housing with the protection of Green Belt land. By defining Grey Belt areas, introducing tiered housing approaches, and supporting SME developers, the framework aims to create a more sustainable and inclusive planning environment. These changes will likely lead to an increase in new housing developments while maintaining the core principles of conservation and smart urban growth.
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