Planning reform and housing delivery

Statement

I am today providing an update on various measures the government is 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 housebuilding.

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 (CMA) 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 housebuilding than is needed.

As a result, the government has 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 is clear that we cannot achieve our ambitious housebuilding 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.

The share of new build homes delivered by SMEs has declined significantly since the 1980s, when smaller housebuilders delivered 40% of the country’s homes. To arrest and reverse the decline of SME housebuilders and so maximise the contribution they can make to new housing supply, the government is acting to support them by increasing their access to land, providing further financial assistance and easing the burden of regulation.

In respect of land, the government has launched a pilot of a new form of partnership between cities, developers and the private sector – a Small Sites Aggregator – that will bring together small plots of land and accelerate their development. The pilot will be trialled in Bristol, Sheffield and the London Borough of Lewisham with support from the relevant regional authorities.

Alongside this, Homes England will release more of its land exclusively to SMEs and the government have also announced a £1.2 million PropTech innovation fund for up to 12 tech innovators to share to work with industry on scalable solutions that accelerate housing delivery and unlock the development potential of small sites.

In respect of finance, the government is allocating up to £100m of the £700m extension to the Home Building Fund announced in December to introduce SME Accelerator Loans. These will provide SMEs with the finance they need to acquire new sites while they are building out existing developments.

We have also provided longer-term certainty of access to finance for SMEs by committing to providing a range of funding tools for SMEs as part of a new National Housing Delivery Fund. This will include revolving credit facilities alongside loans and lending alliances to provide unprecedented government support and ensure SMEs have the access to finances they need to grow, invest and support delivery of 1.5m homes. Further detail will be provided at the forthcoming Spending Review.

Lastly, in respect of regulation, the government has published a Planning Reform Working Paper: Reforming Site Thresholds to seek views on reforming site size thresholds in the planning system to better support housing delivery. The working paper proposes a gradated approach to the planning system – removing and streamlining disproportionate requirements on small and medium sites, while maintaining and strengthening requirements on major ones.

The proposals would see minor development of up to 9 homes benefit from streamlined planning and eased Biodiversity Net Gain (BNG) requirements, alongside faster decisions being taken by expert planning officers, not planning committees. A new proposed category of medium development for 10 to 49 homes would come with simpler rules and fewer costs – including a potential exemption from the Building Safety Levy and simplified BNG rules, making it easier to deliver biodiverse habitats on these sites, delivering a win-win for nature and development.

The Department for Environment, Food and Rural Affairs has also launched consultations on how the implementation of BNG for small and medium developments could be simplified and improved, as well as BNG implementation for Nationally Significant Infrastructure Projects. The respective consultations can be found on gov.uk here and here.

Planning committee reform

To further support the changes set out above, we have published our promised Reform of planning committees: technical consultation providing detail on how we intend to implement the Planning and Infrastructure Bill provisions relating to the delegation of planning decisions, the size and composition of planning committees and mandatory training for members of planning committees.

The government has been clear that planning committees have an integral role in providing local democratic oversight of planning decisions. However, in exercising that democratic oversight, we must ensure that planning committees operate as effectively as possible, focusing on those applications which require member input and not revisiting the same decisions.

Our detailed proposals for the operation of a national scheme of delegation involve directing the majority of minor and technical planning applications to expert local planning offers (Tier A), while enabling all other planning applications (Tier B), which will include all significant new housing and commercial developments, to be determined by committee if the local planning authority chief planning officer (or equivalent officer) and chair of planning committee mutually agree to depart from an assumed delegation. This will ensure that there is greater consistency and certainty across England about who in a local planning authority will be responsible for making planning decisions.

We believe these proposals strike the right balance between empowering professional planning officers and ensuring elected local representatives determine the most significant and contentious applications. I look forward to receiving feedback from hon. Members, local authorities, housebuilders and other important stakeholders.