The time for passive observation is over – SMEs must lead the housing revolution

The year has begun with a palpable sense of optimism in the air. Conversations with leaders across construction, architecture and real estate development reveal a renewed energy – 2025 could mark the start of a sustained period of development growth. With a new government settling in, interest rates on a downward trajectory and the climate agenda still central to decision-making, there is much to be hopeful about. In addition, local authorities are signalling their intent to drive long-term projects and it feels as though the pieces are aligning for a construction and development resurgence.

Of course, this optimism contrasts the geopolitical and economic uncertainties shaping global markets. From the ongoing Ukraine-Russia conflict to US elections and the impact of climate disasters, external shocks continue to test resilience. Yet, history teaches us that adversity often fuels innovation. Now is not the time for hesitation; it is a moment to lead, innovate and shape a built environment that meets the needs of the future.

Labour’s ambitious goal to deliver 1.5 million new homes during its first term is both an opportunity and a challenge. Its proposed National Planning Policy Framework (NPPF) reforms, Greenbelt evolution, ‘Greybelt’ policies, and New Towns initiative have sparked conversations across planning and development circles. The New Towns Taskforce, through its recent Building New Towns for the Future Interim Update (Feb 2025), has reaffirmed the government’s commitment to high-quality, affordable and sustainable communities, with communities themselves high on the agenda.

The proposed New Towns Code sets a gold standard of 40% affordable homes, robust design principles, high-density housing linked to urban centres and seamless access to green spaces. This is more than just a housing strategy – it is a nation-building effort reminiscent of the post-WWII regeneration that reshaped Britain’s urban landscape. If delivered correctly, these new towns could become beacons of sustainable, vibrant and resilient communities.

One of the most exciting aspects of this agenda is the explicit commitment to empowering local and SME businesses. For too long, the industry has leaned heavily on large housebuilders. While they play an essential role, the time has come to embrace a more diverse and dynamic ecosystem of SME housebuilders, community-led initiatives and innovative offsite manufacturers. These players bring agility, creativity and a commitment to sustainability – factors critical in delivering the required scale and quality of homes.

I was privileged to contribute to the Radix Big Tent Housing Commission Report, which emphasized the need for a radical shift in housing delivery models. If we are serious about turbocharging sustainable housing development, we must unlock the potential of SMEs and local enterprises.

Game-changers in the space

Inspirational businesses are demonstrating what is possible when sustainability, innovation and local economic empowerment converge. Consider these four standout SMEs:

• Facit Homes is redefining housebuilding through its hyper-local on-site factory model – a concept that challenges traditional construction by manufacturing homes directly on-site using digital fabrication. This approach reduces waste, shortens build times and offers unparalleled design flexibility. If we integrated such innovative models into planning policy, the impact on housing delivery could be game-changing.
• Leeds-based Citu Homes is pushing the boundaries of sustainable urban living with its Passivhaus and net zero developments. Their Climate Innovation District is a testament to how low-carbon communities can thrive in modern cities. What sets Citu apart is its commitment to sustainability and its socially conscious approach – rooted in localism and long-term environmental stewardship.
• At the intersection of sustainability and craftsmanship is Foresso, a UK-based manufacturer turning unavoidable waste into high-quality furniture and surfaces. With an average material travel distance of just 43 miles, its approach exemplifies how circular economy principles can be embedded into construction and interiors. We showcased Foresso’s work at the 2023 Biennale di Venezia, highlighting its commitment to sustainable material innovation.
• Co-founded by a former Citu employee, Wrapt Homes is transforming the retrofitting sector with a mission to make home upgrades accessible and efficient for homeowners, landlords, and housing associations. In a country where 29 million homes require energy-efficient retrofits, solutions like Wrapt Homes will be instrumental in achieving net zero.

Delivering 1.5 million homes over the next parliamentary term is an ambitious goal, but let’s be clear: achieving it won’t be just about building from scratch. The numbers tell us that the last time the UK hit the 300,000 homes per year target was in 1969/70. Given today’s economic and environmental constraints, a mix of new builds, restorations and deep retrofits will be required to reach this milestone.

The good news? The land exists. Empty properties exist. Millions of homes need retrofitting. By strategically combining these levers, we can meet housing needs in a less carbon-intensive way, more economically efficient and more community-driven.

The time for passive observation is over. The future of our built environment depends on bold thinking, courageous leadership, and innovative approaches to housing delivery. If we genuinely want to solve the housing supply, affordability, skills and sustainability crises, we must empower and invest in the next generation of SMEs and local businesses.

We need more Citus, Facits, Wrapt Homes and Foresso-like enterprises across the UK. The opportunity is vast. The momentum is building. The only question is – are we ready to rise to the challenge?

Lanre Gbolade is co-founder, architect, innovation and DfMA strategist at Gbolade Design Studio