How will Labour's new planning bill affect the property market?

The current Labour Government certainly seems determined to ensure that more homes are built in England, and they have been proactive so far in announcing new planning policies.

Meeting their housebuilding target of 1.5m homes (300,000 a year) by the summer of 2029 will be quite a challenge. The last government built fewer than 200,000 new homes in 2023/4 and, as we reported in our predictions for the 2025 sales market, JLL forecasted last year that Labour would miss the five-year target by 500,000, due to “current planning, labour force and supply chain constraints”.

However, in December, firm changes to the National Planning Policy Framework were announced to help boost supply, including:

• Requiring local planning authorities to demonstrate a 5-year housing land supply.
• Clearly defining ‘Grey Belt’ (land in the Green Belt that has been previously developed or essentially doesn’t satisfy existing Green Belt definitions) and removing the blanket 50% affordable housing requirement on grey belt land.
• Requiring developers to report annually to local planning authorities on their actual housing delivery, so delays can be more clearly identified and addressed.
  
  

What does the Planning and Infrastructure Bill include?

The Government’s new Planning and Infrastructure Bill, introduced on 11^th March, sets out the changes to the planning system that it hopes will speed up decision making and streamline the delivery of new homes and major infrastructure. Most provisions will apply in England and Wales only, though some will have effect in Scotland.

The Bill has been described as enabling the "delivery of new homes and critical infrastructure, supporting delivery of the government’s Plan for Change milestones of building 1.5 million safe and decent homes in England and fast-tracking 150 planning decisions on major economic infrastructure projects by the end of this Parliament."

As well as the building of homes, the Bill includes measures:

• to speed up the delivery of electricity infrastructure to meet the government’s ambition to decarbonise the power sector, as set out in the Clean Power 2030 Action Plan.
• intended to streamline and improve planning processes for transport projects.
• to grant new powers for Natural England to produce ‘environmental development plans’.

Deputy Prime Minister Angela Rayner said the Government would “lift the bureaucratic burden which has been holding back developments for too long” and create “the biggest building boom in a generation”.

This is good news for buyers, sellers and investors!

If the legislations delivers on its intentions, we should see a diverse mix of new properties being built more quickly where they’re needed. That will hopefully give homeowners some choice when they want or need to move and bring new opportunities for private landlords to invest where there is rental demand. The key is going to be ensuring that local councils do actually have the capacity and resources to deliver these additional homes.

The property market only keeps moving if there are first-time buyers (FTBs) coming in at the bottom end, and the measures in the Bill should help ensure that the supply of new homes – including affordable ones – can keep up with most of the demand from FTBs. We are hopeful that a specialist developer deal for FTBs will also be announced in the near future, as we’re currently missing a new incentive for them.

If you’re looking to buy or sell, please get in touch with the team in your local branch. And if you're a first-time buyer wondering what sort of mortgage deal you could get, get in touch with the friendly experts at our sister company, Mortgage Scout.