NPPF reform and the unintended consequences on housing supply

Following on from the “disruptive” changes made in December 2023 to the NPPF which were dubbed by the new Labour Government as “detrimental to housing supply”, consultation on proposed reforms to the National Planning Policy Framework (NPPF) has now closed (24 September).

The new Labour government hopes to take a more growth-focused approach by amending the planning framework, implementing universal, ambitious local plan coverage and committing to build 1.5 million new homes.

This was reinforced at the Autumn Budget as the Chancellor, Rachel Reeves, emphasised the importance of getting Britain building again.

According to the Royal Town Planning Institute (RTPI), the vast majority of planners (96%) are in agreement that change to strategic planning is needed across the private and public sectors if the Government is to deliver on its ambitious target to deliver 1.5 million new homes.

But what changes are being proposed to the planning system, and what effect could these have on housing supply? Gary Jeffries, Head of Residential Property at Vail Williams LLP, explores.

The government’s approach to planning reform and the growth it hopes to inspire, is founded on three core pillars: stability, investment and reform.

The recent consultation sought feedback on the government’s proposed approach to revising the NPPF, as well as a series of wider policy proposals on planning fee increases, local plan intervention criteria and thresholds for Nationally Significant Infrastructure Projects. There was also a particular focus on social and affordable housing which could have implications across various aspects of housing policy and development.

In broad terms, the consultation discussed the following:

• Planning for the homes we need
• A new Standard Method for assessing housing needs
• Brownfield, grey belt and the Green Belt
• Delivering affordable, well-designed homes and places
• Building infrastructure to grow the economy
• Delivering community needs
• Supporting green energy and the environment
• Changes to local plan intervention criteria
• Changes to the planning application fees and cost recovery for local authorities related to Nationally Significant Infrastructure Projects
• The future of planning policy and plan making

Proposals include new mandatory housebuilding targets for councils, a New Homes Accelerator group to overcome a planning bottleneck and address partially built homes, introduction of brownfield passports, and the setting up of a New Towns Taskforce for new large-scale communities.

One key headline to be mindful of within the consultation, however, were proposals around how benchmark land value will be determined

The consultation, which sets out how and when the government expects every local planning authority to rapidly create a clear, ambitious local plan for high quality housebuilding and economic growth, will place additional strain on local authorities who are already under immense pressure to prepare comprehensive local plans.

“The devil will be very much in the detail here. Whilst this could loosen up green / grey belt, on the other hand the fiscal policy in general might inadvertently work against this, with landowners withholding land from the market until a better price can be achieved.”

The Government will respond to the consultation and will publish its NPPF revisions before the end of the year, so that policy changes can take effect as soon as possible.

In the meantime, to help provide a little momentum for local authorities, the government has announced that it is to give £68 million to over 50 councils to remediate brownfield land for the development of new homes.

The funding is the next phase of the Brownfield Land Release Fund which committed £180m to develop brownfield sites for housing, allowing empty buildings and industrial land to make way for new homes.

Not only this, as announced in the Autumn Budget, the Chancellor also announced that it plans to hire hundreds of new planning officers to help improve and address the lack of resource within local planning authorities (LPAs).

Together with £5bn of investment to deliver on the government’s ambitious housing targets, there will also be further investment in the delivery of affordable homes (£3.1bn) and £3bn in guarantees to support small housebuilders.

The government also announced that it will reduce Right to Buy discounts and that local authorities will be able to retain the full receipts to be reinvested back into the housing stock and into new supply to give more people a safe, secure and affordable place to live.

One area of potential concern from the Budget, could be the impact of the changes in tax provisions on agricultural land. The government announced that it would restrict agricultural property relief and business property relief for the wealthiest estates from 6 April 2026, which could bring with it unintended consequences for land supply and development.

However, overall, the outlook from the Budget for the residential property sector, and in particular social housing, was a positive one.