Report: Small is beautiful: delivering more homes through small sites

We will not build the homes we need in the UK on large sites alone. Instead we will have to find ways to unlock a range of smaller sites for development and work with small and medium developers to build on them. This is the only way to provide the capacity and variety of tenure that we need, while being sensitive to local needs and supporting local economic growth, jobs and skills. This new report from LGiU in partnership with the Federation of Master Builders (FMB) focuses on how local authorities can help to make this happen.

Respondents to the FMB Home Builders Survey said that allocation of more small sites in Local Plans was the key to getting more homes built. But bringing forward small sites is challenging.

Allocating them for development can be resource intensive and planning departments are already under sever pressure. They have been severely hit but central government funding cuts since 2009/10 and a lack of staff capacity, knowledge and skills can often act as a barrier. Just under half of the respondents to our survey of councillors and planning officers said that lack of resources was a key barrier.

Unallocated sites often come forward as windfalls, which entails greater risk for small developers, who already have tight profit margins. The planning process is often complex and difficult for builders to navigate. Half of local authority survey respondents said that the poor quality of applications from developers is a key barrier to greater home building.

In solving this key policy challenge a lot will depend on building stronger dialogue and closer relationships between councils and smaller developers. Around 80 per cent of local authority survey respondents said they actively engage with SME builders in their area, although this was not reflected in responses to the FMB’s Home Builders Survey.

In our research, which included a survey of councillors and officers form England, Scotland and Wales, we found that:

  • Not enough small sites are being allocated in Local Plans.
  • A lack of resources and capacity in planning departments is a key barrier to building on small sites.
  • 87 per cent of local authority respondents to our survey said the Government will not reach its target of one million new homes by 2020 with current resource levels.
  • The developer market is very concentrated and there are fewer and fewer SME builders in operation. Councils should do more to support and engage local SME builders, and should do more to use their assets creatively.

To support more building on small sites, we make the following recommendations, which are set out in more detail in the report:


  1. Local planning authorities should be required to include within their local plans a strategic consideration of the contribution that small sites can make to local housing delivery, and how they can enable this to come forward.
  2. Councils should seek to broker, where feasible, relationships between small builders and landowners.
  3. Councils should use their assets creatively, including giving consideration to the use of direct commissioning, joint ventures and deferred payment models.


  1. Councils should pool and share staff, skills and resources on a regional basis in order to be able to draw on the broadest range of skills and develop expertise in enabling small sites.
  2. The Government should give councils the power to set and vary planning fees locally where extra revenue can be ring-fenced and good service levels guaranteed.
  3. Government should consider establishing a pilot “Small Sites Expert Task Force” to develop best practice and act as a source of expert advice on how to enable small scale development.

Improving the application process

  1. Council should seek to reduce complexity and uncertainty in the application process, through the use of coordinating codes and through early engagement on key issues like conditions and Section 106 obligations.
  2. Councils should set up internal “Small Sites Working Groups”, and/or co-locate housing and planning teams to ensure consistency of approach across the council.

Knowledge and Understanding

  1. The industry, led by the FMB, should produce a short ‘best practice’ guidance document for small builders on how to approach planning for small sites.


10. Councils should improve their strategic engagement with SME house builders, including where possible by establishing developer forums, online portals or workshops for smaller builders.

13 Dec 2016
Andrew Walker
Relates to
Unlocking Small Sites for Housing
Full report (PDF, 2.86 MB)