New Rules for Small Housebuilders: Balancing Homes and Wildlife in the UK

The UK faces a housing crisis, with a government target to build 1.5 million new homes by 2030. At the same time, protecting the environment remains a priority, with rules like Biodiversity Net Gain (BNG) ensuring new developments enhance nature. Recently, the government announced plans to review these environmental regulations, particularly for small housebuilders in England, to make it easier to build homes on smaller sites. This move aims to support small businesses and speed up construction while still aiming to protect wildlife habitats. But what does this mean for UK residents, local communities, and the environment? Let’s dive into the details of these proposed changes, why they’re happening, and what they could mean for the future.

Why Are These Changes Happening?

The UK’s housing shortage is no secret. Last year, England saw a record low in housing projects granted planning permission, with just over 30,000 projects approved. This is a far cry from the numbers needed to meet the government’s ambitious 1.5 million homes target. Small and medium-sized housebuilders, who once accounted for 40% of UK homes in the 1980s, have seen their market share shrink significantly. The government believes that complex planning rules and costly environmental regulations are holding these smaller firms back.

To address this, the Labour government is proposing reforms to simplify the planning process, particularly for developments of up to nine homes. These changes include easing the Biodiversity Net Gain requirements, which currently mandate that developers deliver a 10% improvement in biodiversity for at least 30 years after a project is completed. By reducing these obligations, the government hopes to lower costs for small builders, enabling them to play a bigger role in tackling the housing crisis.

What Is Biodiversity Net Gain?

Introduced under the 2021 Environment Act, Biodiversity Net Gain (BNG) is a legal requirement for most new developments in England. It ensures that any project that impacts natural habitats must leave the environment in a better state than before. Developers are required to assess a site’s biodiversity value and commit to a 10% improvement, which must be maintained for at least 30 years. This could involve creating new habitats on-site, restoring nearby green spaces, or, as a last resort, purchasing biodiversity credits from the government to fund nature restoration elsewhere.

Since February 2024, BNG has been mandatory for larger developments, with smaller sites (those with nine or fewer homes) included from April 2024. While the policy has been praised for promoting nature-positive development, some argue it places a heavy burden on smaller housebuilders, who often lack the resources to navigate complex ecological assessments or afford additional costs.

The Proposed Changes for Small Housebuilders

The government’s plan focuses on streamlining the planning process for smaller developments. For projects of up to nine homes, trained planning officers, rather than local councillors, would have the authority to approve applications. This aims to speed up decisions and reduce delays caused by planning committees. Additionally, these minor developments could see relaxed BNG requirements, potentially including a full exemption from the 10% biodiversity improvement rule.

For medium-sized sites (10 to 49 homes), the government is proposing a new category with simplified regulations. These sites could also benefit from reduced BNG obligations and an exemption from the Building Safety Levy, a tax designed to fund the removal of unsafe cladding. Alongside these changes, £100 million in loans will be made available to support smaller housebuilding firms, helping them access the finance needed to get projects off the ground.

These reforms are part of a broader consultation launched to review BNG rules for minor, medium, and brownfield developments. The consultation, which runs for eight weeks, will explore options like extending exemptions or simplifying the biodiversity assessment process for small sites.

The Housing vs. Nature Debate

While the government insists these changes are about “pragmatism” and not compromising environmental protections, not everyone agrees. Conservation groups have raised concerns that easing BNG requirements could harm wildlife and local ecosystems. They argue that small developments, while individually minor, collectively have a significant impact on biodiversity. Exempting these sites could mean nearly three-quarters of new developments face no obligation to offset nature loss, potentially undermining the UK’s commitment to halt species decline by 2030.

On the other hand, small housebuilders and industry groups have welcomed the proposals. They argue that the current BNG rules create disproportionate challenges for smaller firms, which lack the resources of larger developers. Simplified regulations could help these businesses thrive, creating local jobs and boosting housing supply in communities across England.

What This Means for UK Residents

For people living in England, these changes could have a tangible impact. More homes built by small developers might mean greater availability of housing in local areas, potentially at more affordable prices. Smaller projects often blend better with existing communities, avoiding the sprawl of large estates. The government’s focus on brownfield sites—previously developed land—could also help revitalise urban areas without encroaching on green spaces.

However, the potential relaxation of BNG rules raises questions about the quality of local environments. Green spaces, such as urban wildflower meadows or hedgerows, provide benefits like cleaner air, flood prevention, and spaces for recreation. If fewer developments are required to enhance biodiversity, residents might miss out on these natural assets, which are vital for wellbeing and community life.

The government’s consultation will be key to striking a balance. It aims to ensure that nature-positive planning remains a priority while making it easier for small builders to contribute to housing goals. UK residents can share their views through the consultation process, helping shape how these reforms unfold.

Looking Ahead: A Balanced Future?

The government’s push to simplify planning and ease environmental rules is a bold step toward meeting its 1.5 million homes target. By supporting small housebuilders, the reforms could breathe new life into an industry that’s been squeezed out by complex regulations and big developers. The £100 million loan package and streamlined approvals show a commitment to levelling the playing field for smaller firms.

Yet, the concerns from conservation groups can’t be ignored. Biodiversity Net Gain was introduced to ensure that development doesn’t come at the expense of nature, and any rollback risks undermining that promise. The ongoing consultation will be crucial in finding a middle ground—allowing housebuilding to flourish while protecting the wildlife and green spaces that make the UK special.

For UK residents, this is a chance to see more homes built in their communities, but it’s also a moment to advocate for a future where development and nature go hand in hand. Keep an eye on the consultation outcomes, expected to shape policies by May 2026, to see how this balance is struck.

Conclusion

The proposed changes to environmental rules for small housebuilders in England are a pragmatic response to the UK’s housing crisis, aiming to empower smaller firms to build more homes. By easing Biodiversity Net Gain requirements and simplifying planning, the government hopes to boost construction without sacrificing environmental goals. However, with concerns about the potential impact on wildlife, the consultation process will be critical in ensuring these reforms benefit both people and nature. For UK residents, this is an opportunity to engage with policies that could shape their communities for decades to come.