Government recognises medium-sized housing sites in NPPF planning changes

By Danny BallPublished On: August 24th, 2026Categories: News, Top Stories

The Government has formally recognised medium-sized housing sites of between 10 and 49 homes in its response to the National Planning Policy Framework (NPPF) consultation, creating a new planning category aimed at supporting SME housebuilders.

The change forms part of a wider package of amendments to national planning policy and is intended to distinguish smaller development schemes from major projects of 100 homes or more.

The National Federation of Builders (NFB) had previously called for a specific classification for sites of between 10 and 40 homes, arguing that the planning system should better reflect the capacity and constraints faced by smaller housebuilders.

Richard Beresford, Chief Executive of the National Federation of Builders, said: “After more than a decade of being let down, SME housebuilders and in particular NFB members were anxious that our medium sized site proposal of between 10 and 40 homes would be tweaked or removed after consulting all bodies.

“Yet, Labour did not flinch and have delivered for SMEs by recognising that a site of 10 to 49 homes should not be treated in a similar way to one of 100 or 1,000.

“The medium sized site is not a silver bullet, but creates an opportunity to ensure that SMEs, our industry trainers, retainers and supply competitors have a pathway to ensure their survival and growth.”

New planning category creates carve-outs for SMEs

Medium-sized sites will remain within the existing classification of major development, which covers schemes of more than 10 homes, rather than becoming a standalone planning category.

However, the new classification will provide certain policy carve-outs, including access to permission in principle rules.

The Government has also decided not to proceed with a proposal that would have allowed medium-sized developments to make cash payments in lieu of affordable housing provision.

The NPPF changes will also support housing for older people as a specific delivery need, while military housing will be classified as affordable housing.

The Government has chosen not to introduce a national minimum percentage for social rent homes, instead leaving local plans to determine appropriate requirements.

Planning changes could affect housing delivery

New development around railway stations will face higher density expectations where services are frequent. Schemes around stations with four or more trains per hour will be expected to deliver 35 dwellings per hectare, rising to 45 dwellings per hectare where services reach six or more trains per hour.

New planning guidance will also seek to reduce reliance on viability assessments. Local planning authorities will have discretion to reduce affordable housing requirements on developments qualifying under the Government’s proposed ‘Golden Rule’ approach, rather than being subject to fixed national minimum requirements.

The NFB said the recognition of medium-sized sites could provide greater opportunities for SME builders, which it said train 80% of construction apprentices and play a significant role in responding to local housing needs.

Rico Wojtulewicz, Director of Policy and Market Insight at the NFB, said: “SMEs train 80% of construction apprentices, intrinsically respond to local housing need. create the capacity for non-market housing and proportionately deliver the most affordable housing.

“Labour has recognised and understood that, turning a promise to help SMEs into action, not only by introducing a medium sized site but also requiring 10% of local plan housing to be delivered on them.

“House Builders Association (HBA) members have already been in touch to congratulate myself and the board on our medium sized site campaign but also reminding us that this is the start of reinvigorating our regional builders.

“This means finding solutions when the Government reassesses how the medium sized site could support SMEs, such as permitting in lieu cash payments instead of delivering affordable homes or being exempt from the Building Safety Levy.

“And ensuring that the new classification streamlines planning in as many ways as possible, for example, limiting planning conditions and pushing for local plans to deliver 20% or 30% of homes on sites of fewer than 50 units.”