In the 2010s, Britain’s planning system was poised for a breakthrough. With the introduction of the National Planning Policy Framework (NPPF) and the Housing Act of 2016, long-awaited simplifications to the planning regime were made. Tomes of cumbersome planning regulation were replaced with a concise framework aimed at expediency and, crucially, delivery.
It was needed, the previous Labour government recession meant that housing builds had fallen well below 100,000 homes a year.
A decade and a half on, development have again slowed to a snail's pace. While Labour are right to see the critical link between planning and growth as one that needs untangling, planning reform alone will not suffice. People are struggling with the cost of living challenges, they are also being required to build sizeable deposits to get onto the mortgage ladder and that is holding back more and more people from getting onto the housing ladder of ownership.
Without confidence in demand side ability to buy, developers will be rightly wary of driving up supply, they will want confidence that there buyers are there and able to.
In 2012, the NPPF cut through heaps of red tape to build a streamlined framework for development. It mandated local authorities grant approval for projects (unless trumped by national policies) and offered increased flexibility for development opportunities outside of city centers. It connected local control with true local responsibility to deliver homes that were needed.
Labour must support first-time buyers or face a UK growth crisis - Sir Brandon Lewis
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Similarly, the Housing Act of 2016 took the housing crisis head-on. It introduced the Starter Homes initiative that gave first-time buyers a 20% discount on new-build homes. In addition, the Act fast-tracked developer approvals which helped keep costs down and accelerate project delivery. Together, these efforts worked to deliver around 250,000 new homes per year, delivering on Conservative Party’s efforts to exceed its pledge of one million new homes while in office.
However, since 2018, the planning landscape has taken a troubling turn. The process which once promised simplicity now appears bogged down in complexity and inefficiency with fewer and fewer homes being delivered each year.
Much of this negative influence comes from the Town and Country Planning Act whose near 80-year entrenchment continues to stymie development. The Act’s original aim of providing discretionary, case-by-case decision-making to local authorities was an attempt to encourage planned reforms while limiting unwanted construction. In effect, however, it has operated as a de facto barrier to nearly all new development almost anywhere across the country and left many potential buyers sidelined.
The Labour government is wise to set its sights on planning reforming as a key to growth. However, to cut through cleanly and clearly in the name of change, Labour must not simply tinker with reforms but foster market confidence through targeted, impactful support.
As Labour ramps up its rhetoric on growth, uncertainty over the on-again/off-again threat of US tariffs means interest rates in the UK are likely to remain high for some time. First-time homebuyers will be at risk of failing to secure favorable mortgage rates and continue to struggle to find the finances to build a deposit, while developers grow skeptical that any supply of new homes will go unfilled. In such a bind, Labour’s efforts to reform the planning system will only go so far.
Labour must follow through with its ramped up rhetoric on growth.
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When the last Conservative government dropped support for first-time buyers, builders grew cautious of promises of growth only for projects to be buried under planning bureaucracy or, if they manage to navigate the maze, encountering a shortage of willing buyers on the other side. Improving market confidence through skillful and supportive intervention for first-time homebuyers should be a top priority of the Labour government.
Just a decade ago, I saw how developers gained confidence to increase supply, knowing buyers would be there in turn through programs like the Starter Homes initiative and the Help to Buy scheme. Labour can and should do the same by extending or creating programs like these and signalling its support to developers and importantly buyers alike.
Today more than ever, the government must return to the principles of simplicity and efficiency. The reforms of the 2010s proved that streamlined planning can drive real progress in home building while reducing costs and increasing appetite for homeownership. Efforts to continue tinkering with the planning process will support Britain’s long-term aim of increased housing supply; however, fostering the economic confidence needed to jump start the housing market must also be made a pillar of any strategy.
