BLOGS

A new era for mayoral planning

The Planning and Infrastructure Bill, currently progressing through Parliament, represents the most significant shift in regional planning governance since the abolition of Regional Spatial Strategies in 2010. Under the proposed legislation, elected mayors in England's combined authority areas will gain powers to create binding strategic spatial development strategies—effectively regional plans that local planning authorities must align with.

For investors and developers focused on large-scale residential and mixed-use schemes, this centralisation of strategic oversight could prove transformative. REalyse data shows that cross-boundary developments—those straddling multiple local authority areas—have historically faced planning timelines 30-50% longer than single-authority schemes. The fragmented nature of decision-making, with each council operating independently, has long been cited as a barrier to housing delivery at scale.

The new powers extend beyond strategy-setting. Mayors will be able to designate Strategic Development Zones where streamlined planning processes apply, potentially reducing determination times for major applications. London's experience with Mayoral Development Corporations in areas like the Olympic Park and Old Oak Common provides a template, though the bill expands this model significantly.

The promise: unlocking strategic sites

The government's stated ambition is to build 1.5 million homes over the current parliament, and mayoral strategic planning is positioned as a key delivery mechanism. Combined authority areas covering Greater Manchester, the West Midlands, West Yorkshire, South Yorkshire, Tees Valley, Liverpool City Region, the North East, and others collectively contain some of England's most significant brownfield regeneration opportunities.

REalyse analysis of planning pipeline data indicates that mayoral combined authority areas hold over £120 billion in proposed residential and mixed-use development value, with a substantial proportion of these schemes currently stalled or progressing slowly through fragmented local planning systems.

The Greater Manchester Combined Authority provides an instructive case study. The Places for Everyone joint development plan, covering nine of the ten Greater Manchester boroughs, took over five years to adopt and faced significant legal challenges. Under the new framework, Mayor Andy Burnham would gain direct authority to set strategic housing allocations and infrastructure priorities, potentially compressing such timescales considerably.

For build-to-rent investors and residential developers, the implications are significant. Strategic sites near major transport infrastructure—a core focus of the bill—typically command rental yield premiums of 0.3-0.5 percentage points above local averages, according to REalyse market data. Faster planning certainty on such sites could accelerate capital deployment decisions.

The risk: mayoral community infrastructure levy complexity

The bill's most contentious provision for the development sector is the introduction of a mayoral community infrastructure levy (MCIL). While London has operated an MCIL since 2012—originally funding Crossrail—extending this model to other combined authorities introduces new layers of cost and complexity.

Under the proposals, elected mayors would gain powers to set and collect infrastructure levies on qualifying developments within their areas, operating alongside existing local authority CIL charges and Section 106 agreements. For a major residential scheme in the West Midlands, this could mean navigating three separate developer contribution regimes: site-specific Section 106 obligations, local authority CIL, and a new mayoral levy.

Industry bodies have raised concerns about cumulative charging impacts. The Home Builders Federation has warned that layering an additional levy risks pushing marginal sites into unviability, particularly in areas where land values are lower than London. REalyse sales transaction data shows that achieved £/sqft values in many northern combined authority areas sit 40-60% below equivalent London zones—yet infrastructure funding needs remain substantial.

The bill provides mayors with discretion over levy rates and exemptions, creating potential for significant regional variation. A development in Manchester could face an entirely different charging structure to an equivalent scheme in Sheffield or Birmingham, complicating appraisal assumptions for multi-regional investors.

Implementation challenges

Beyond rate-setting, operational questions persist. Who will administer the levy collection—combined authorities or local councils? How will funds be ringfenced and deployed? The London experience, while broadly successful in funding the Elizabeth line, involved years of system development and ongoing tensions over allocation priorities.

For developers conducting feasibility assessments today, the lack of clarity represents a material risk. Schemes with planning timelines extending into 2027 and beyond must factor in potential MCIL exposure, yet indicative rates remain unpublished for most combined authority areas.

What this means for the market

The combined effect of these reforms will play out differently across England's diverse regional markets. In high-demand, high-value areas like Greater Manchester's regional centre, strategic planning powers could accelerate already strong pipelines. REalyse planning data shows over 15,000 residential units currently in the active Manchester planning pipeline, with strategic transport connectivity a common theme.

In lower-value markets, the balance tips differently. Areas where gross development values already struggle to support viable schemes may find an additional levy layer prohibitive, potentially concentrating development activity in established urban cores while leaving peripheral sites undelivered.

Investors should also note the political dimension. Mayoral elections occur on five-year cycles, introducing potential for policy shifts that could affect levy rates, strategic priorities, and zone designations. The bill provides limited protections for schemes already in the planning system, but longer-term pipeline assumptions carry inherent political risk.

Outlook: navigating the transition

For property professionals, the message is clear: strategic planning powers are coming, and preparation is essential. Developers should engage early with combined authority spatial planning teams to understand emerging strategic priorities. Investors should factor potential MCIL exposure into appraisals, stress-testing schemes against a range of levy scenarios.

REalyse will continue tracking planning pipeline movements, infrastructure levy consultations, and market impacts as the bill progresses. The combination of strategic oversight and local implementation detail will ultimately determine whether these reforms deliver on their promise of faster, more coherent housing delivery—or simply add another layer to an already complex system.

The transition period matters. Schemes that can accelerate through the current system before new levies take effect may benefit from first-mover advantages, while those entering planning later will need to price in the new regime from the outset.