BLOGS

A new era of mandatory targets — but delivery remains elusive

The December 2024 revision to the National Planning Policy Framework (NPPF) marked one of the most significant shifts in English planning policy in a generation. Labour's 1.5 million homes target over this parliament — averaging 300,000 new homes per year — is backed by a reinforced Standard Method for calculating local housing need, and councils that fail to maintain an up-to-date local plan now face the very real prospect of speculative development being approved on appeal.

Yet nearly two years on from that reset, the picture on the ground is fractured. Some local authorities are moving at pace to adopt compliant local plans; others have paused, amended or quietly watered down their housing numbers — caught between central government pressure and intensely local political resistance to growth.

The result is a planning landscape that is simultaneously accelerating and stalling, depending almost entirely on where you look.

House price signals: tailwind or headwind for plan-making?

For local authority planners and cabinet members, house price data is not merely a market metric — it is a political temperature gauge. Strong price growth in an area signals unmet demand and bolsters the case for allocating more land. Softening prices, by contrast, can prompt questions about whether large-scale housing delivery would simply depress values and deter viability.

Land Registry data from mid-2026 points to a two-speed market that is complicating plan-making in precisely this way. Average UK house prices remain around £290,000–£295,000, but the regional spread is stark. In London and the wider South East, prices remain elevated — with many districts sustaining average values well above £400,000 — while large parts of the Midlands, the North and Wales sit in a range where new-build viability margins are tighter and developer appetite is more selective.

REalyse data shows that in a number of higher-demand districts — particularly across the Home Counties and commuter belts of the East and South East — average sold prices per square foot for new-build flats and houses remain significantly above those of older stock, reinforcing the case for supply-led responses. In contrast, several Northern and Midlands authorities examining their local plan housing trajectories are seeing achieved prices on completed schemes that sit closer to, or in some cases below, the viability thresholds needed to fund affordable housing obligations and infrastructure contributions through Section 106 agreements.

This divergence is not abstract. It is shaping exactly how ambitious — or cautious — councils are willing to be when setting their housing numbers.

The Grey Belt gamble: opportunity or political liability?

One of the most consequential policy innovations in the 2024 NPPF revision was the introduction of the "Grey Belt" — a category allowing development on lower-quality, previously developed, or less visually sensitive land within the existing Green Belt boundary. In theory, this unlocks substantial land supply in areas where conventional Green Belt policy had functionally prohibited growth for decades.

In practice, the picture is more complicated. Identifying Grey Belt land requires detailed assessment, and early evidence from REalyse planning data suggests that, while a meaningful number of planning applications citing Grey Belt principles have been lodged across Greater London's fringe and the wider South East, the volumes remain well below what the policy's architects envisaged at launch.

Councils face a genuine tension. Releasing Green Belt — even the greyest parts of it — carries significant local political risk. Residents groups, parish councils and local councillors in suburban and semi-rural areas are mobilising against Grey Belt allocations with the same vigour once reserved for conventional Green Belt fights. Meanwhile, developers and land promoters are pressing for early allocation decisions to avoid the cost and delay of appeal-led routes.

The financial stakes are high. Land that secures a local plan allocation with residential consent can increase dramatically in value — in some well-connected outer London and South East corridors, from agricultural or commercial values of £500,000–£1 million per acre to residential land values of £3 million–£5 million per acre or more, depending on density, tenure mix and affordable housing requirements. For councils, that uplift represents a potential source of community infrastructure funding — if the infrastructure levy framework, currently still in transition, can be made to capture it effectively.

Infrastructure lag: the constraint that targets cannot fix

Even where local authorities are willing to set ambitious housing numbers, infrastructure remains the structural constraint that threatens to turn allocations on paper into delivery failures on the ground.

The proposed Infrastructure Levy — intended to replace the existing patchwork of Community Infrastructure Levy (CIL) and Section 106 obligations — has been long delayed, and councils are operating in a prolonged period of uncertainty about what tools they will have to fund roads, schools, health facilities and utilities in new communities. In several fast-growing areas, local authorities have explicitly cited infrastructure uncertainty as a reason to moderate housing numbers in emerging local plans, rather than risk allocating land that cannot be serviced.

Transport connectivity is particularly acute. REalyse market data consistently shows that properties within 800 metres of an existing or planned rail or tube station command meaningful premiums over otherwise comparable stock — often in the range of 8–15% depending on the area and service frequency. That premium signals where new housing can be absorbed into existing travel patterns. But in areas without that infrastructure foundation, large-scale housing delivery risks creating car-dependent settlements that generate planning objections, slower sales absorption and, ultimately, value erosion.

Water infrastructure is an increasingly prominent constraint in the South East, where nutrient neutrality rules and capacity limitations at treatment works have already stalled or slowed hundreds of planning permissions in recent years. Several local plans in Hampshire, Surrey and parts of Essex have had their housing trajectories scrutinised at examination precisely because the sewerage and water supply networks cannot currently accommodate the growth being proposed.

Regional divergence: who's pushing ahead and who's pulling back?

The most active plan-making is concentrated — perhaps unsurprisingly — in the areas where housing pressure is most acute and political alignment with growth is strongest. Several Greater Manchester districts have used recent devolution frameworks to press forward with strategic housing land allocations. In parts of the West Midlands Combined Authority area, regional coordination is at least partially overcoming the fragmentation that hampers plan-making in areas without mayoral structures.

By contrast, many shire counties and coastal authorities are navigating far more contested terrain. In areas where recent elections have delivered politically mixed councils — or where local populations skew older and homeowning — the political economy of growth is hostile. Some of these authorities have submitted local plans to examination with housing numbers below their Standard Method figures, banking on "exceptional circumstances" arguments that, under the revised NPPF, carry a significantly higher evidential burden than before.

Wales and Scotland operate under separate planning frameworks — Planning Policy Wales and the National Planning Framework for Scotland respectively — but face analogous tensions. Scottish local development plans have their own housing land audit obligations, and recent data from a number of Scottish cities shows a widening gap between planned housing land supply and actual completions, driven by a combination of developer caution, infrastructure constraints and, in some cases, stalled regeneration projects where land values have not recovered sufficiently to make schemes viable.

What this means for developers, investors and lenders

The current environment presents both risk and opportunity for those with capital deployed — or considering deployment — in UK residential development and investment.

For developers, the priority is identifying local authority areas that combine a near-compliant or recently adopted local plan with realistic infrastructure delivery timescales and active housing land allocations. REalyse planning data can map the pipeline of committed and emerging allocations, cross-referenced with infrastructure constraints and market viability indicators, to identify where schemes are most likely to move from allocation to consent to construction without protracted delay.

For investors — particularly those underwriting build-to-rent or co-living strategies — the interplay between local plan certainty and rental market fundamentals is increasingly important. Across a number of regional cities, REalyse rental data shows achieved rents running ahead of asking rents from 12–18 months ago, reflecting tight supply relative to demand. Areas where local plan uncertainty is suppressing new supply may actually present near-term rental yield opportunities, even as they signal longer-term undersupply risk.

For lenders, the planning status of a site or scheme is a material underwriting factor. Developments relying on Grey Belt allocations that have not yet been formally adopted into a local plan carry a different risk profile from those with extant planning permissions on allocated land. Understanding where in the plan-making and consenting cycle a scheme sits — and how robust the local authority's housing trajectory is — has become a core element of residential development finance due diligence.

Conclusion: targets are the floor, not the ceiling

The reinstatement of mandatory housing targets has reset the baseline. Local authorities that refuse to engage with their Standard Method figures face an increasingly hostile policy environment, with inspectors and the Planning Inspectorate empowered to intervene where plans are found to be insufficiently ambitious.

But targets, however mandatory, do not build homes. The gap between an adopted local plan housing number and an actual completed dwelling is filled — or blocked — by viability economics, infrastructure delivery, political will, and market conditions that vary enormously across the country's 300-plus local planning authorities.

The councils that will genuinely level up are those that treat their local plan not as a political ceiling to be negotiated downward, but as an active land and growth strategy — one that uses market data, planning pipeline analysis and infrastructure capacity modelling to make the case for, and deliver on, the growth their areas need.

The rest risk finding that, when the next NPPF revision comes, the question is no longer about levelling up. It's about who has been left behind.