SMEs need ‘medium sized site’ without an area threshold

The Government’s ‘Planning Reform Working Paper: Reforming Site Thresholds’ proposes a ‘Medium’ sized site threshold of 10 to 49 homes, a definition which has won considerable plaudits across the small and medium sized (SME) housebuilding industry.

However, the definition also includes a maximum area measurement of 1 hectare area size, which SME housebuilders express as inappropriate because Local Planning Authorities (LPAs) already set locally acceptable density policies and the increasing policy and development requirements on land use, such as drainage, biodiversity, grid, sewerage, active travel, mean sites regularly go over 1 hectare.

The consequence of an area-based threshold means that many SMEs would miss out on the Medium sized site definition, alongside its introduction of planning proportionality.

Michael Parinchy, Construction Manager at ProBuild 360 Ltd and HBA Chair, said: “With minimum densities, housing mix policies, and other obligations like BNG, highways, SUDs etc, hectares, or other area measurements, are not a good metric to determine site size category.

For SMEs, the commercial viability of a development is calculated using plot numbers, so to use other thresholds and measurements would be a misunderstanding of how things work at this scale and counterproductive to the real-world activation of the SME housebuilding sector.”

In ‘Size ‘still’ Matters: Dwellings Matter more’ we build on our ‘Size Matters’ report 2025 – which introduced four site size thresholds alongside our seven-year campaign for a ‘Medium’ sized site – to explain why our proposals did not include measured area thresholds and why the Government’s future consultation on a ‘Medium’ sized site should follow that lead.

Focusing exclusively on ‘Medium’ sized sites, ‘Size Still Matters’ explores:

• LPA responses to the NPPF consultation which introduced the 1-hectare limit
• Whether that subsequent NPPF policy to support SMEs and smaller sites succeeded
• How Local Plans, supported by national policy, already shape locally appropriate dwelling per hectare (dph) levels.
• Explores how housing developments are giving over more land for non-residential needs, and why that land take is increasing.
• What type of projects are most likely to benefit from the proposal as currently conceived.
• Why most SMEs will not benefit from an area-based measurement.

Rico Wojtulewicz, Head of Policy and Market insight for the NFB and House Builders Association (HBA), said: “We are incredibly grateful that the Government has listened to industry by recognising the dwelling numbers that SMEs typically deliver on single sites. However, the inclusion of a measured area threshold risks excluding most SMEs from the proportionate planning reforms associated with a Medium sized site, and so our report ‘Size Still Matters’ illustrates why that is and why it is not needed.”