I am today providing an update on various measures the Government are taking to further reform the planning system and achieve our ambitious plan for change milestone of building 1.5 million safe and decent homes in this Parliament.
Speeding up build-out rates on large sites
Last year, the Government took decisive action to overhaul national planning policy through our December 2024 updates to the national planning policy framework. The changes made included the introduction of a new, mandatory standard method for assessing housing needs, and a new strategic approach to green-belt land designation and release that prioritises development on lower-quality grey-belt land. By allocating more land for development, the pro-growth framework that is now in place provides the foundation for higher rates of house building.
However, to significantly boost housing delivery we must close the gap between the amount of land allocated and permissioned and the number of homes being completed. The Competition and Markets Authority and others have concluded that most homes in England are not built as fast as they can be constructed, once permission is granted, but only as fast as the developer expects to sell them at local second-hand market prices. This leads to a build-out rate for large sites which can take decades to complete. While it is commercially rational for developers to operate in this way, the systemic impact is a lower level of house building than is needed.
As a result, the Government have published a “Planning Reform Working Paper: Speeding Up Build Out”, setting out a five-part strategy and a series of proposals to speed up build-out. These include measures to support mixed-tenure development; the implementation of conditional confirmation of compulsory purchase orders; and, as a measure of last resort, exploring the case for a delayed homes penalty, for use in instances where build-out is falling significantly behind the agreed schedule without a reasonable justification.
Alongside the working paper, we published a technical consultation on implementing measures to improve build-out transparency to gather views on the introduction of a new statutory build-out framework, which requires developers to submit information at different stages of the planning and development cycle, and a power for local authorities to decline to determine applications submitted by developers who persistently fail to build out sites quickly. We will also make it easier for councils to issue completion notices, which require housebuilders to complete development within a reasonable period of time, else the planning permission will cease—a form of “use it or lose it”.
Supporting small and medium-sized housebuilders
The Government are clear that we cannot achieve our ambitious house building targets without diversifying the housing market and making it more competitive. That means supporting a range of different developers, including small and medium-sized housebuilders.