David Bainbridge, director in the Savills central planning team and Andy Moffat, director and head of planning for Savills in the East of England, discuss the new Government’s plans for housing.
The new Labour Government has come to power on the back of manifesto promises that aimed to boost growth through planning reform and the delivery of higher numbers of new homes.
During the campaign, in an interview with Kier Starmer and Rachel Reeves in the Sunday Times, they suggested that several key announcements will be made within the first fortnight of the new Government, or included in the King’s speech on July 17.
We know their previous shadow team will remain, with Angela Rayner becoming the Secretary of State and Matthew Pennycook the Minister of State responsible for housing and planning. Rayner will be leading the new Ministry of Housing, Communities and Local Government (MHCLG).
In her first speech as Chancellor of the Exchequer, Reeves provided the Government’s initial policy proposals to ‘kickstart growth’ based on three pillars – economic stability, investment and reform – and described planning as currently a “graveyard for economic ambition”.
A new consultation draft version of the National Planning Policy Framework (NPPF) is now expected to be published in the next two weeks, which will reverse many of the changes introduced at the end of 2023. For effective reform, the new Government needs to be able to establish a clear direction of travel quickly, as we have seen over the past four years how disruptive protected policy changes can be to the Local Plan process.
The changes are expected to include making the standard method for calculating housing need mandatory rather than an ‘advisory starting point’. Currently, 94 local planning authorities (LPA) have an adopted Local Plan with an annual housing target lower than the need identified under the standard method, and 20 LPAs with emerging plans have published lower draft annual targets.
The consultation draft NPPF is expected to make clear any onward transition period whereby housing targets apply to new Local Plans, though it might be immediately for the purposes of deciding planning applications. It is not yet known whether Labour would seek to amend the Standard Method, which presently amounts to less than 300,000 dwellings per annum.
A new version of the NPPF would also likely remove the changes to the five-year land supply requirements, which have made it easier for LPAs to pass. Since the December 2023 changes, 39 per cent of LPAs are now either exempt from having to demonstrate a five-year housing land supply requirement, as they have an up-to-date local plan, or only have to demonstrate four years’ worth of land supply as they have made sufficient progress towards adopting a new plan.
We estimate that around 90 LPAs, mainly in the West Midlands and the South East, would fail to be able to demonstrate a sufficient housing land supply if these relaxed requirements are reversed.
Angela Rayner is also expected, within the next couple of weeks, to instruct local authorities to regularly review their Green Belt boundaries. Over 60 per cent of local authorities without a post-NPPF plan in place contain Green Belt.
Clear policies on how it should be reviewed could help improve Local Plan progress and the identification of enough land to meet housing requirements in these areas. The consultation draft NPPF might also update national Green Belt policy, introducing a new definition of Grey Belt – which would apply immediately for planning decisions. It also remains to be seen whether Labour will consult on National Development Management policies later this year.
Local authorities in the Oxford Cambridge Arc will have to consider what the changes mean for planning sustainable development, with a renewed emphasis on setting and delivering housing targets with infrastructure provision. This is especially relevant for cross-boundary strategic planning.
Beyond planning policy, there are several areas which will have implications for residential development of all tenures. Reform and regulation of the private rental sector is expected to be included in the King’s Speech as one of the priorities for the next parliamentary session.
For delivery of affordable housing, key issues to be resolved include levels of grant funding available through the Affordable Homes Programme post-2026, and the settlement for social and affordable rents after 2026.
To deliver quick wins, Reeves also announced the formation of a Growth Mission Board/Delivery Unit, which will target stalled major sites – including Northstowe in Cambridgeshire. In addition, some key planning decisions have immediately been recovered by the Secretary of State for determination, including two data centres in Buckinghamshire and Hertfordshire.
Finally, there are high aspirations to boost development through a new wave of new towns. Angela Rayner pledged at UKREiiF in May that the Government would announce a list of new projects within their first 12 months.
However, we expect this to be the area where progress is slowest. Any quick wins to increase house building will come from elsewhere.
Image shows Andy Moffat (left) and David Bainbridge (right).
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