BLOGS

The ambition is historic. The delivery challenge is equally so.

When the Labour government set a target of 1.5 million new homes over the course of this Parliament — roughly 300,000 per year — it set a benchmark that England has not hit in over 50 years. The previous record in recent decades was approximately 234,000 completions in 2022–23, according to DLUHC figures. Closing that gap in a single parliamentary cycle requires not just more planning consents, but faster delivery, better-resourced local authorities, and land that actually stacks up financially.

The revised National Planning Policy Framework (NPPF), published in late 2024, is the engine behind Labour's approach. It reinstated mandatory local housing targets, removed the ability of councils with recent delivery shortfalls to dodge their obligations, and — most controversially — introduced the concept of the "grey belt."

What is grey belt, and why does it matter for land values?

Grey belt is defined as land within the Green Belt that is either previously developed or makes a "limited contribution" to the five purposes of the Green Belt. Think: scrubby car parks on the edge of commuter towns, disused petrol stations adjacent to village boundaries, or low-grade grassland buffer zones with no meaningful ecological or visual function.

In theory, this unlocks a meaningful slice of England's approximately 1.6 million hectares of Green Belt — estimated by government advisers at somewhere between 80,000 and 150,000 hectares — without touching the countryside that voters actually care about: ancient woodland, flood plains, and Areas of Outstanding Natural Beauty.

In practice, the land value implications are seismic. Agricultural or low-grade amenity land within the Green Belt typically trades at £5,000–£20,000 per acre. The same land with residential planning permission in a commuter belt location — say, on the edge of Buckinghamshire, Central Bedfordshire, or the Kent Green Belt — can reach £1 million to £3 million per acre. REalyse data shows that among the highest-volume residential planning pipelines outside London, Buckinghamshire alone has over 57,000 units proposed in the current cycle, with Central Bedfordshire and West Northamptonshire each exceeding 50,000 proposed units — all areas where Green Belt and grey belt land sits directly in the path of housing demand.

Landowners and their agents are well aware of this dynamic. The scramble to identify, promote and option grey belt parcels began the moment the NPPF consultation landed, and land agents have reported a significant uptick in Green Belt boundary reviews across the South East, East of England, and Midlands growth corridors.

The pipeline looks large. The delivery gap is the real story.

At first glance, the national planning pipeline appears healthy. REalyse data covering residential planning applications from 2023 to 2025 shows approximately 19,700 schemes with "In Progress" status, collectively representing over one million proposed units. That sounds like more than enough to hit the 1.5 million target. It is not.

The crucial distinction is between units proposed and units built. The relationship between planning consent and completed homes has always been porous — subject to viability renegotiation, legal challenges, infrastructure delays, and market conditions — but three metrics in the current data are particularly telling.

First, over 13,800 schemes are currently classified as On Hold or Shelved, accounting for nearly 55,000 proposed units. These are schemes that secured or are pursuing consent but have stalled before a spade has gone in the ground. The average estimated value of these paused schemes — around £670,000 — is significantly lower than the £8.6 million average for schemes actively progressing, which implies it is marginal, smaller-scale schemes — precisely the type that planning reform might unlock — that are most vulnerable to viability pressures.

Second, a further 3,100 applications covering over 112,000 units are in "Status Pending," meaning they are unresolved in the system: neither approved, refused, nor withdrawn. For a government promising a faster, more decisive planning system, this backlog is a live problem.

Third, the completion rate relative to consented units nationally has historically hovered at around 60–70%, meaning a consent is not the same as a home. Getting from 300,000 consents per year to 300,000 completions requires solving the implementation chain, not just the application process.

The golden rules: affordable housing ambition meets viability reality

Grey belt sites are subject to what the government calls "golden rules": a requirement for at least 50% affordable housing, necessary infrastructure contributions, and measurable improvements to green space access. The intent is to prevent grey belt reform from becoming a windfall giveaway to landowners and housebuilders at the expense of communities.

The viability tension is real and well-documented. In high-value markets — prime commuter belt towns in Surrey, Hertfordshire, or outer East London — 50% affordable housing is deliverable and developers will absorb it in their land bids. In lower-value markets across parts of the East Midlands, the North West, or coastal areas, that same requirement can make a scheme unviable without grant subsidy. REalyse rental yield data reflects this bifurcation: gross yields in some northern markets exceed 6–8%, suggesting rental demand exists, but sales values may not support the land cost assumptions that viability models require.

Developers and their consultants will challenge these requirements on a site-by-site basis. Some local authorities, already stretched thin, will lack the in-house expertise to counter those arguments robustly. The likely outcome in some markets is downward renegotiation of the affordable housing requirement — diluting one of the core justifications for releasing grey belt land in the first place.

Planning departments: the human bottleneck

No planning reform — however well-designed — can outpace the capacity of the people processing it. England's local planning authorities have lost a significant share of their experienced planners over the past decade, hollowed out by budget pressures and a persistent pay gap relative to the private sector. According to the Local Government Association, the number of qualified planners in local government fell by over 15% between 2010 and 2023.

The government has responded by raising planning fees — up 35% for major applications and 25% for minor ones in 2023 — and has signalled further fee reform to make local authorities self-funding on planning income. There is also a commitment to recruit 300 additional planners nationally, funded centrally. Both steps are welcome. Neither comes close to matching the scale of what 300,000 homes per year demands in terms of processing, negotiation, and monitoring capacity.

The Planning and Infrastructure Bill, introduced in 2025, attempts to further streamline the process — including proposals to reduce the scope for legal challenge via Judicial Review and to give greater weight to national infrastructure designations. Whether these measures survive parliamentary scrutiny intact remains to be seen.

What does this mean for investors and developers?

For investors tracking development opportunity, the grey belt reform creates a clearer signal than any planning policy change in a generation: land adjacent to Green Belt boundaries in high-demand commuter areas is now a legitimate target for residential promotion, where it previously was not.

REalyse data points to areas like Milton Keynes (nearly 70,000 proposed units in the current pipeline), Tower Hamlets and Ealing in London, and the Buckinghamshire–Bedfordshire growth corridor as geographies where planning supply and market demand are converging. However, the on-hold data serves as a warning: supply on paper does not translate automatically to homes on the ground.

For lenders and institutional investors underwriting development finance, the relevant question is not just whether planning can be achieved, but how long it will take and at what cost in professional fees, holding charges, and political risk. On grey belt sites subject to the golden rules, the affordable housing requirement is a first-order variable in every GDV model — and one that can move materially during the consent process.

Conclusion: the timetable will slip. The direction is right.

Labour's 1.5 million homes pledge is the right aspiration. The grey belt reform is a meaningful and pragmatic tool. The NPPF changes create genuine momentum. But the delivery system — planning capacity, viability frameworks, infrastructure funding, and build-out rates — cannot yet match the pace the government has set for itself.

REalyse data suggests the raw pipeline of consented and proposed units is substantial, but the stalling rate for smaller schemes and the volume of unresolved applications are live vulnerabilities. The most likely outcome is a strong uplift in delivery relative to the recent baseline — perhaps reaching 250,000–270,000 completions per year by mid-Parliament — rather than the full 300,000 that the pledge requires.

The grey belt will unlock land. The golden rules will test whether that land can actually deliver the homes and infrastructure communities need. And the planning system will determine the speed of the answer.