In yesterday’s Spring Statement, Chancellor Rachel Reeves announced significant planning reforms aimed at boosting the UK’s housing sector by accelerating housebuilding and stimulating economic growth.
Head of Planning, David Ramsay, explores the potential impact of the proposed reforms, which include reintroducing mandatory housing targets for local authorities and releasing low-quality green belt land for development.
- Mandatory Housing Targets: Reinstating obligatory housing targets for local authorities to ensure a consistent and increased supply of new homes.
- Green Belt Development: Permitting construction on low-quality green belt land to expand housing availability while maintaining environmental considerations.
These measures are designed to pressure local authorities to approve more housing projects. Despite potential challenges such as rising construction costs and interest rates, the reforms are expected to lead to a 0.8% decrease in average house prices by 2029.
Meanwhile, official forecasts from the Office for Budget Responsibility (OBR) predict that the planning reforms will significantly boost UK housebuilding, with government plans to increase annual housebuilding to over 305,000 homes by 2029 – the highest rate seen for decades.
However, the Chancellor also acknowledged that it is likely to miss its manifesto pledge of building 1.5 million homes by the next general election, with an estimated 1.3 million new homes expected over the next five years.
The government also announced a £2 billion grant to build 18,000 new social and affordable homes, including a construction training package to train up to 60,000 workers to build the homes, described as the most significant boost to affordable housing in a generation.
Whilst the planning reforms aim to stimulate economic growth by increasing housing supply, potentially making homes more affordable and delivering more affordable homes, they also present significant challenges.
As always, the devil will be in the detail – from balancing development with environmental concerns, to ensuring local infrastructure can support the level of increased housing.
Ultimately, the success of the planning reforms announced in the Spring Statement will depend on effective implementation and collaboration with local authorities and communities. The resourcing of planning departments and ensuring the availability of enough Planning Inspectors will be key to facilitating delivery of significantly more housing.
In the meantime, we will continue to monitor developments with the proposed planning reforms, to keep our landowner, developer, investor and public sector clients up to date with the latest changes and how they may be affected.
