By Bilal Ahmed, Founder and Executive Chairman of Sama Investment Group
An overhaul of the planning system recently announced by Deputy Prime Minister Angela Rayner means that all councils in England are to be given new mandatory housing targets to deliver 1.5 million homes. Meanwhile the Ministry of Housing, Communities and Local Government (MHCLG) carried out a consultation on proposed reforms to the National Planning Policy Framework (NPPF).
This has raised important questions for both property developers and investors about how these changes affect them, and how they need to respond.
Major change afoot
There is no doubt that Ms Rayner means business. She has written to all council leaders and Chief Executives in England to make clear that there is “not just a professional responsibility but a moral obligation to see more homes built”, and that she will use her powers of intervention should it be necessary. In addition to restoring mandatory housing targets, the method used to calculate them will be updated. The new method will require councils to ensure homes are built in the right places and development is proportionate to the size of existing communities.
The default answer to brownfield development will be “yes” from now on, to promote homebuilding at greater densities in towns and cities. Councils will have to review their green belt land if needed to meet their own target, identifying and prioritising “grey belt” land. This includes land on the edge of existing settlements or roads, as well as old petrol stations and car parks.
Where local authorities do not have up-to-date plans in place or enable sufficient housing to come forward to meet local targets, homebuilders can bring forward proposals on grey belt land, but land that is safeguarded for environmental reasons will continue to be protected.
Green Belt golden rules
Land released in the Green Belt will be subject to the government’s “golden rules” where development should deliver 50% affordable homes, increase access to green spaces and put the necessary infrastructure is in place, such as schools and GP surgeries.
Ms Rayner has also confirmed that details of future government investment in social and affordable housing will be brought forward at the next spending review.
These changes will be followed by further reforms in the Planning and Infrastructure Bill, with the introduction of a national scheme of delegation focusing planning committees on the applications that matter, avoiding potential developments being reviewed multiple times even where they have been included in a local plan, and placing more trust in skilled professional planners.
The Government is also confirming its intention to introduce a universal system of strategic planning across England in this Parliament, and that it aims to do more to support mixed use sites.
Other measures include increasing the flexibility on how councils can use their Right to Buy receipts, and confirmation that the third round of the Local Authority Housing Fund will be going ahead – with £450 million to councils to acquire and create homes for families at risk of homelessness.
Consultation on NPPF reforms
Proposals under consideration for the MHCLG’s consultation on proposed reforms to the NPPF included:
- Making the standard method for assessing housing needs mandatory, requiring local authorities to plan for the resulting housing need figure, planning for a lower figure only when they can demonstrate hard constraints and that they have exhausted all other options
- Reversing other changes to the NPPF made in December 2023 which were detrimental to housing supply
- Implementing a new standard method and calculation to ensure local plans are ambitious enough to support the Government’s manifesto commitment of 1.5 million new homes in this Parliament
- Broadening the existing definition of brownfield land, set a strengthened expectation that applications on brownfield land will be approved and that plans should promote an uplift in density in urban areas
- Identifying grey belt land within the Green Belt, to be brought forward into the planning system through both plan and decision-making to meet development needs
- Improving the operation of ‘the presumption’ in favour of sustainable development, to ensure it acts an effective failsafe to support housing supply, by clarifying the circumstances in which it applies; and, introducing new safeguards, to make clear that its application cannot justify poor quality development
- Delivering affordable, well-designed homes, with new “golden rules” for land released in the Green Belt to ensure it delivers in the public interest
- Making wider changes to ensure that local planning authorities are able to prioritise the types of affordable homes their communities need on all housing development and that the planning system supports a more diverse housebuilding sector
- Supporting economic growth in key sectors, aligned with the Government’s industrial strategy and future local growth plans, including laboratories, gigafactories, datacentres, digital economies and freight and logistics – given their importance to our economic future
- Delivering community needs to support society and the creation of healthy places; and support clean energy and the environment, including through support for onshore wind and renewables
The Government will respond to this consultation, which ended on 24 September, and publish NPPF revisions before the end of the year so that policy changes can take effect as soon as possible.
Deciphering the details
There is much to be deciphered here. The mandatory standard method for assessing housing needs will require local authorities to plan based on a new standardised figure. This shift will likely enable developers to streamline housing delivery but may impose challenges for areas that have significant environmental or landscape constraints.
The reversal of the December 2023 NPPF amendments signals a reversion to policies more favourable to housing supply, which could help revitalise stalled projects and enhance further development prospects. Additionally, the introduction of a new standard method and calculation aims to ensure local plans support the Government’s ambitious target of 1.5 million new homes within this Parliament. However it also poses challenges for areas with significant environmental or landscape constraints, as these regions may struggle to accommodate the standardised housing needs without compromising their environmental integrity.
Higher standards
The identification and integration of grey belt land within the Green Belt into the planning system clearly demonstrates a strategic opportunity for development. This measure seeks to balance conservation with development needs, offering new opportunities for housing projects in areas previously restricted by green belt policies. The clarification and improvement of “the presumption” in favour of sustainable development, alongside the introduction of new safeguards, will require developers to meet higher sustainability and quality standards, preventing the justification of poor-quality development.
Furthermore, the emphasis on delivering affordable, well-designed homes with new “golden rules” for Green Belt land releases underscores the need for balancing public interest with delivery. Local planning authorities will gain more control to prioritise affordable housing types, addressing their community’s specific needs.
Renewables opportunity
The Government’s support for clean energy, including onshore wind and renewables, reflects an ongoing commitment to its sustainability goals, encouraging developers to incorporate renewable energy projects into their portfolios. This focus on renewable energy also presents a significant opportunity for our clients in the sector to enhance and expand their existing projects.
The consultation also sought views on reforming the Nationally Significant Infrastructure Projects regime, updating local plan intervention policies, and increasing planning fees to better resource local planning authorities. This provides an opportunity for developers to have some level of influence on the final policy outcomes and ensure their interests are represented.
Increased urban density demand
Developers should anticipate increased demand for urban density, prioritise sustainable and affordable housing, and leverage opportunities in key economic and renewable energy sectors. By aligning their proposals with the Government’s ambitious housing and sustainability targets, developers will be able to maximise their chances of project approvals.
