Speeding up housing delivery, or more roadblocks for the development industry?

The Government has begun its consultation on planning reform with its first of a suite of Working Papers designed to speed up the delivery of housing across the UK. The initial paper was issued on 25th May, and is aptly titled “Speeding up Build Out”. Having spoken with relevant experts from across Daniel Watney’s diverse teams, we give a holistic overview of the paper itself as well as their individual view on its potential success.

The paper focused on the need to improve the speed at which houses are built once they have received planning permission, and the Government announced a five part ‘build out plan’:

• Reforms to the planning system;
• Sustainably supporting demand;
• Supporting the growth of SME developers building small sites;
• Encouraging large, strategic sites to be built with greater tenure diversity; and
• Strategic master-planning, in particular through Homes England, new Development Corporations and the expanded role for Mayoral Strategic Authorities in spatial planning.

But, according to our experts, can it do “what it says on the tin?”.

The reforms to the planning system itself, includes the initial alterations made to the updated National Planning Policy Framework, which noted a partial review of Green Belt policy to create the concept of ‘Grey Belt’ (which will only apply in narrow circumstances) and requires a significant uplift in the delivery of affordable housing, as well as proposed changes to the scheme of delegation and Committee structure in determining applications.

According to Charlotte Yarker (Partner, Planning), these reforms are “a moving feast”, with more reforms to follow which the Government has not outlined.

Yarker states that “the extent to which these reforms increase the delivery of housing will be seen in due course. There is no doubt that those that genuinely accelerate the granting of planning permission for housing must be welcomed.”

However, Nick Clark (Partner, Project & Building Consultancy), commented on the practical elements required to speed up the process which are lost within the current considerations: “additional key barriers to house building including financial constraints, limited infrastructure, regulatory hurdles, local opposition, skills shortages, and rising material costs. These reforms do not address these important macro-issues.”

The second section outlined by the Government, relates to "sustainably supporting demand”, which refers to the affordability of homes, with the Government stating “[we are] committed to a permanent, comprehensive Mortgage Guarantee Scheme to ensure a steady supply of low-deposit mortgages to first time buyers across the market cycle”

According to Yarker, “any proposals to improve the affordability of housing are positive. However, it must be the case that the only way to ensure affordability is to meet demand with supply.”

The Government is keen to support the growth of SME developers building small sites through a number of measures, including relaxing some of the planning burdens placed upon them.

It is no doubt a positive development that efforts are being made to encourage as many housebuilding companies as possible, and Yarker believes the Government is “right to recognise the significant planning burdens that developers currently face”.

However, she also states that “the extent to which the relaxation of onerous requirements such as Biodiversity Net Gain (BNG) measures will improve the delivery of smaller sites by smaller house builders, remains to be seen.” Alongside the concerns expressed by Clark, Yarker commented “Developers are also impacted by macro-factors (such as labour and materials costs) so it will be interesting to see whether the measures the Government are choosing to relax actually affect the delivery of all housing in a positive way.”

In relation to the final two measures; encouraging large, strategic sites to be built with greater tenure diversity and increasing the role for strategic master planning, again, will this actually speed up the delivery of new homes as the Government intends?

We have spoken with a number of housebuilder clients for their view, and the general consensus seems to be that whilst they are a worthy consideration, partnership models are time intensive, and are unlikely to speed up site starts or guarantee an accelerated delivery pace.

Similarly, Yarker states that “greater levels of affordable housing isn’t a measure to speed up development in itself. A Housing Provider must be in place, with funds to be able to progress with a site. Suggesting these are levers to accelerate development is wholly inaccurate.”

As well as the reforms and measures to positively encourage the delivery process, the Government is intending to introduce a “Delayed Homes Penalty”, essentially penalising developers who do not build homes fast enough once planning permission has been granted. Attempting to hold housebuilders to account, The Government has also requested that developers must commit to delivery schedules and submit annual progress reports to local councils as part of planning permission conditions.

However, Toby Greville (Partner, Development Advisory), believes it is unlikely this will actually be enforceable:

“It presents significant practical challenges when it comes to its enforcement. Existing planning permissions already include a three-year expiry rule to address delays, and the introduction of a legal test of "reasonableness" for assessing the causes of delay risks creating substantial legal uncertainty. This approach could lead to increased litigation, potentially deterring developers from undertaking projects and inadvertently contributing to further delays. As currently framed, the policy may not achieve its intended outcomes and could actually impose additional burdens on the development process.”

Key Takeaways

• Planning reform that reduce the burden upon developers of all sizes is very welcome.
• However, care must be taken to ensure that positive measures are not undone by unrealistic requirements of complex delivery partnerships or the failure to adopt a pragmatic approach in the case of development sites that are facing genuine viability constraints.
• Similarly, the ‘sticks’ proposed by the Government, such as holding developers to a delivery rate at the application stage, also have the propensity to result in unintended consequences in the delivery of housing and must be avoided.
• The Government is consulting on these proposals until 7 July 2025. Should you wish to discuss your thoughts on this paper with us, please don’t hesitate to get in touch with the team here at Daniel Watney.

Charlotte Yarker, Partner, Planning

Nick Clark, Partner, Project & Building Consultancy

Toby Greville, Partner, Development