SME Developers, the NPPF, and the Reality on the Ground
As our Index reporting throughout 2025 has shown, developer intent is at its highest level in years. The appetite to build new homes is stronger than it has been for some time, with more housing units now entering the planning system than at any point since 2021. However, both approval and importantly delivery metrics have continued to lag.
Before Christmas, we received extensive further updates to the National Planning Policy Framework - pushing through yet more planning reform. Encouragingly for smaller developers, the adjustments contain several measures aimed at loosening obligations and easing restrictions for this group - including the introduction of a new ‘medium size’ of development - but are these policy updates enough?
Planning Portal and TerraQuest have recently partnered with The Modern Builder to expand access to tools and resources designed specifically for self-builders and SME developers. We asked them for their perspective on the latest updates to the National Planning Policy Framework. As specialists in the small and medium-sized developer market, with a platform that connects projects to delivery capability, they have a front-line view of how policy changes are playing out in practice.
David Johnson, The Modern Builder:
For years, SME property developers have been positioned as a critical part of the UK’s housing solution. As specialists working with small and medium-sized developers, we see this impact first-hand - and the latest direction of the National Planning Policy Framework (NPPF) further reinforces it, with greater flexibility for smaller developers across local delivery, brownfield development and faster decision-making at every level.
On paper, this is obviously welcome progress. However, in practice, planning policy reform alone does not unlock housing delivery. For many SME developers, the real constraint is not securing permission, but what happens after consent is granted.
Planning Permission is not the finish line
The NPPF places renewed emphasis on:
· Supporting small and medium sized builders to secure planning
· Encouraging efficient use of land
· Accelerating delivery to meet housing need
· Improving design quality and sustainability
However for many SMEs, planning approval is only the beginning of a far more uncertain phase.
Once consent is granted, developers are immediately exposed to:
· Volatile construction pricing
· Contractor availability constraints
· Rising finance and borrowing costs
· Skills shortages
· Programme and delivery risk
· Unclear routes into modern methods of construction
In our experience working closely with SME developers, this post planning phase is where many schemes begin to stall. We have seen projects fail to progress due to financial viability challenges across very different scales and geographies, from a consented block of flats in London to an eight plot residential site in Burnley. In both cases, planning approval was secured, but uncertainty around build costs, delivery models, and risk allocation prevented the schemes from moving forward.
As is clearly demonstrated by the increasing number of housing units being applied for, - shown in TerraQuest and Planning Portal’s Application Index series - developer intent is there, in earnest. Nevertheless, the gap between policy intent and delivery reality remains one of the most significant barriers to SME led housing delivery.
The missing link: Delivery certainty
While the updated NPPF encourages positive outcomes, with key measures across housing delivery numbers, sustainability and quality, it does not sufficiently address how SME developers are expected to de-risk delivery once permission has been granted.
Without certainty around:
· Build costs
· Programme timescales
· Supply chain reliability
· Construction methodology
Well-meaning planning reform risks becoming aspirational rather than transformational.
For SMEs operating with tighter margins, limited balance sheets, and higher exposure to market volatility, delivery uncertainty is often the decisive factor in whether a scheme proceeds or stalls.
Modern methods of construction are policy aligned, but hard to access
Modern Methods of Construction - manufacturing buildings or components uniformly off-site, using digital design and precision engineering and assembling buildings on-site from pre-made parts - are frequently referenced as part of the solution, offering:
· Faster build times
· Reduced site disruption
· Improved energy performance
· Greater cost predictability
In principle, MMC aligns well with the objectives of the NPPF, but in practice, many SME developers struggle to:
· Understand suitability for specific sites and planning constraints
· Secure early stage cost clarity
· Integrate MMC into planning, design, and funding discussions
· Compare MMC suppliers in a meaningful way
Too often, MMC is introduced after planning approval or at tender stage, when key design and cost decisions have already been fixed. Its real value lies much earlier, at feasibility and planning stage, where buildability and cost certainty can shape better outcomes.
From planning approval to build ready
If SME developers are to deliver on the opportunities offered within the updated NPPF, the industry needs stronger infrastructure around post-planning delivery.
This includes:
· Earlier visibility of construction options
· Realistic and comparable cost benchmarking
· Clear routes to compliant and buildable systems
· Stronger accountability across the supply chain
This is not about replacing planners, architects, or contractors. It is about connecting decisions earlier, reducing uncertainty, and enabling informed delivery led choices.
Why platforms matter in the new planning landscape
As planning policy evolves, digital infrastructure must evolve alongside it.
Platforms that sit between planning data, design intent, cost certainty, and delivery capability are becoming increasingly important, particularly for SME developers without large in-house teams.
When it comes to securing planning permission, Planning Portal naturally plays a pivotal role in that ecosystem. By introducing integrated tools and services - such as building control applications and built-in location plans - they’re streamlining the application process, helping to make planning faster, simpler and more reliable. Reducing the number of suppliers involved cuts friction and costs and helps create more transparent digital records for each project. When it comes to post-planning, however, at The Modern Builder, we see a continued demand for integrated, targeted tech post-planning;
· Developers want to assess build viability alongside planning strategy
· Suppliers want earlier and better qualified projects
· Planning led development increasingly requires delivery led decision making
The future SME developer is not just navigating policy; they are managing risk across the entire development lifecycle, and they will need the digital tools to help them handle this with confidence.
A final thought for SME developers
The direction of travel within the NPPF is positive.
However, housing delivery will only accelerate when planning reform, construction certainty, and supply chain transparency move forward together. For SME developers, the opportunity is clear, but so is the challenge. Success in the next phase will belong to those who can move beyond permission and progress confidently from consent to construction.
Want to keep up to date with the latest trends across planning and development?
At Planning Portal, we’re committed to ensuring our users have access to the data that matters most. We publish monthly planning application figures in our Market Insight Report, and our quarterly Planning Application Index tracks housing applications across the UK, with a focus on the 1.5 million target and on regional trends.
Read our latest report to see what’s happening in planning right now -and sign up to our free weekly newsletter to get the latest planning and development insights delivered straight to your inbox.
