The government has launched a consultation on planning reform. Their rationale? Reforms to the National Planning Policy Framework, which governs planning rules in England, are seen as a key step towards boosting housebuilding and economic growth.
Under the proposed plans, local authorities in England will once again have to meet mandatory housebuilding targets, set in accordance with a new standard method for calculating housing needs. They will only be able to plan for a lower number if they can show that they have exhausted all options to perform better.
The consultation also proposes making it easier to release Green Belt land for development. However, any housing developments on Green Belt land will have to include at least 50% affordable housing, and also benefit the local community.
Will planning reforms boost housebuilding enough?
Developers have welcomed the proposed changes. Major housebuilder Persimmon upped their annual forecast in response, and the industry as a whole seems to have received a boost. As a result, analysts such as Anthony Codling, head of European housing and building materials for investment bank RBC Capital Markets, believe the Labour government will boost housebuilding.
But the government’s target of 370,000 new homes a year is a significant step up from current levels. In 2023, 231,100 new homes were completed, lower than the previous year. And the UK already has a severe shortage of homes, estimated at around 4.3 million last year by the Centre for Cities.
Industry experts warn that high interest rates deter private builders from building – and while the government could step in and build houses itself, there isn’t much room for that in the public finances.
The government can also expect opposition from local authorities who believe that their housebuilding targets have been set too high. Meanwhile, concerns have surfaced that some of the areas with the highest demand for housing have had their targets set too low. Professor Tim Leunig, economist at the London School of Economics, warns that the new formula results in targets that are too low to meet massive demand in London and the South East, while targets are too high in the North East where prices are low and it may not be viable for developers to build.
How to take part in the consultation
The consultation on the National Planning Policy Framework is open until 24 September 2024. Responses can be submitted online via Citizen Space, or using e-mail or post.
Other policy headlines
Government leasehold reform cheered by campaigners – Mortgage Finance Gazette
Is Labour about to give councils full powers to license landlords? – LandlordZONE
Housing minister rejects rent controls in England outright – The Negotiator
