BLOGS

A planning system under pressure, and under scrutiny

Since taking office, the Labour government has made planning reform its clearest lever for boosting housing delivery, revising the National Planning Policy Framework, reinstating mandatory local housing targets and signalling greater willingness to intervene in stalled or contentious schemes. For institutional investors in build-to-rent (BTR) and purpose-built student accommodation (PBSA), this is not abstract policy noise. Planning risk sits at the centre of underwriting models, land acquisition timelines and joint venture structuring, and any shift in how decisions are made, or who makes them, changes the calculus for deploying capital.

Recent called-in decisions and high-profile joint ventures, including Watkin Jones' East London student scheme, illustrate how sponsors and funders are adapting. The pattern emerging is one of cautious recommitment: capital is still flowing into rental-sector housing, but it is increasingly concentrated in schemes with a clearer path through planning, stronger local authority alignment, and partners able to absorb pre-consent risk.

Where the BTR pipeline is concentrating

REalyse planning pipeline data shows London remains the dominant market for BTR by a wide margin, with the largest concentration of granted, in-progress and completed schemes of any UK region, spanning tens of thousands of units across all pipeline stages. That scale reflects both deep institutional demand and the density of large regeneration sites able to accommodate single-family and multifamily rental at volume.

Beyond London, the East of England and East Midlands show meaningful but comparatively modest pipelines, a mix of granted schemes moving through construction alongside a smaller tail of pre-planning and status-pending applications. This regional imbalance matters for the reform debate: government pressure to unlock supply outside London and the South East is real, but the data suggests BTR delivery outside major cities remains earlier-stage and more exposed to viability and planning uncertainty.

For investors, this reinforces a familiar discipline REalyse clients already apply: use comparables and rental yield data at the postcode and district level rather than regional averages, since the gap between a scheme progressing smoothly through committee and one stalled at pre-planning can be substantial even within the same local authority.

Called-in decisions as a signal, not just a delay

Call-ins by the Secretary of State have historically been read by the market as a source of delay and cost. Under the current government's more interventionist posture, several BTR and PBSA schemes have been called in or referred for additional scrutiny, often where local authorities were minded to approve but strategic issues, such as design quality, affordable housing contributions, or transport capacity, triggered central review.

The practical effect for institutional sponsors is twofold. First, the additional diligence layer favours schemes with strong planning consultant teams and demonstrable local authority engagement well before submission. Second, it is pushing joint venture structures toward experienced operating partners who can manage extended timelines without triggering funding covenant breaches. Watkin Jones' approach to its East London student scheme, structured through partnership rather than solo development risk, reflects this broader shift toward shared risk models as the norm for larger PBSA and BTR consents.

PBSA: a resilient asset class navigating a tighter local politics

Student accommodation has weathered planning reform discussions differently to mainstream BTR. Undersupply against rising full-time student numbers in key university cities continues to support rental growth and occupancy, and REalyse rental yield data across PBSA-adjacent stock typically shows income returns holding up well relative to standard residential rental comparables in the same catchment. However, PBSA schemes face their own planning friction: local political sensitivity around purpose-built student blocks in city centres, particularly regarding cumulative impact on housing mix and community amenity, means consents are increasingly conditional on wider place-making contributions.

The Watkin Jones East London scheme is instructive here. Structuring the development as a joint venture allows the group to share both planning risk and the capital burden of delivering the affordable housing, public realm, or community benefits that local authorities are now more likely to demand as a condition of approval, especially in boroughs where the new NPPF's brownfield and grey belt provisions increase the pressure to deliver quickly but sustainably.

What this means for underwriting and site selection

For investors, lenders and developers assessing new BTR and PBSA opportunities, the current environment argues for three practical adjustments:

• Weight planning stage explicitly in risk pricing. Schemes already at "Granted" or "Under Construction" status carry materially lower execution risk than those at pre-planning, and REalyse pipeline data can help benchmark how long comparable schemes in a given local authority have taken to move between stages.

• Favour joint venture and partnership structures for larger consents. The call-in risk on flagship schemes, particularly those over 200-300 units or with a significant affordable housing component, makes shared-risk delivery models more attractive than single-sponsor development.

• Use granular comparables, not regional averages, for viability testing. With London absorbing the bulk of BTR pipeline activity, appraisals for schemes in secondary cities should lean on district-level rental yield and price data rather than assuming regional trends will hold uniformly.

Outlook

The direction of travel under the new government is toward faster, more centrally steered planning decisions, but with higher expectations attached to what gets approved. For build-to-rent and student housing, this is likely to reward institutional sponsors who can combine patient capital with strong planning execution, while schemes reliant on speed alone may find the path to consent no smoother than before. As more called-in decisions and joint ventures like Watkin Jones' East London scheme reach resolution over the coming months, they will offer an increasingly clear signal of how the reformed planning framework is actually being applied on the ground, and where the next wave of institutional rental investment is likely to land.