Central to her address was the urgency of planning reform. This is what I have been personally waiting to hear, and what I asked for in an article I wrote back in July: that the incoming government had to bite the bullet on planning reform to ramp up the supply of new homes.

The dire state of our public sector planning was laid bare in a report prepared by Public First in the wake of the election. The report, commissioned by the Royal Town Planning Institute (RTPI), revealed that planning reform and increased housing development could miss out on over £70 billion in additional value by not investing in planning. Previous research by the RTPI had shown that public spending on planning had faced a 16% decline since 2009. Planners are overworked and understaffed, and the profession continues to be underinvested. Last year, RTPI reported that from 2013 to 2020, a quarter of planners left the public sector.

Planning reform alone won’t solve the housing crisis

But as I have long been advocating, planning reform alone won’t solve the housing shortage. Indeed, while the discussion around tackling the housing crisis and growing delivery has become increasingly synonymous with planning, we do need to be widening the conversation. Planning reform is not the silver bullet that will solve the housing crisis and there is a danger that unless the conversation starts to move on, the many other challenges threatening delivery may fall by the wayside. One of the key honest conversations that is largely overdue is how our industry and the government can collectively step up our support for SME housebuilders.

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According to the Federation of Master Builders (FMB), SME housebuilders are responsible for delivering just 12% of new homes, down from 39% since 1988, with the FMB’s House Builders’ Survey 2023 finding that 42% of small house builders were held back by access to finance. And while the emergence of regulated non-bank lenders has facilitated SME housebuilders’ access to finance and significantly enhanced their borrower journey in recent years, not all small property developers are aware of the funding options available to them. So, both at the industry level and at the government level, much more needs to be done to increase SME housebuilders’ awareness about funding through regulated non-bank lenders.

The emergence of regulated non-bank lenders goes back to the post-2008 Global Financial Crisis. Prior to then, high street banks were the safest, and pretty much only, source of funding for developers looking to build homes. But then around 2010 the concept of the challenger bank was born, bringing with it the ideology of hyper-specialist lending divisions. This was a bid to differentiate from the high street banks who had become increasingly risk adverse and rigid within their appetite to lend, the era of computer says no, as it was following 2008.

Over the proceeding period, challengers pretty much dominated the development lending space while specialist non-bank lenders remained in the shadows and were mainly used to service unbankable developers, developers who due to their lack of experience, credit profile, or both, would have been undoubtedly turned down by high street and challenger banks.

However, small challenger banks grow into big banks and development funding, arguably the most specialist of all sectors, got absorbed within a much larger banking beast and the layers of reporting and risk analysis that go with it. This is exactly the point where the borrower journey at challenger banks began to change and hesitation of support and appetite crept in.

In recent years, the development funding market has again evolved, this time splintering away from banks altogether to create nimble specialist non-bank lenders, focused on supporting development funding with teams of highly experienced, through the cycle decision makers. Specialist non-bank lenders have positioned themselves at the centre of the lending ecosystem, but now regulated and with clearly defined appetite to support, especially SME housebuilders underserved by the larger banks.