BLOGS

A government serious about supply — but the hard work is just beginning

When Labour entered Downing Street in July 2024 with a mandate to build 1.5 million homes over the Parliament, the housing industry was cautiously optimistic. The previous administration had softened mandatory local housing targets, leaving councils with significant discretion to resist or water down their obligations. Labour moved quickly to reverse that.

By December 2024, a revised National Planning Policy Framework (NPPF) was in place. The standard method for calculating housing need was restored and strengthened. Mandatory targets were back — and this time, councils that failed to maintain an up-to-date Local Plan or demonstrate a credible five-year housing land supply faced the prospect of planning decisions being made against them at appeal.

Now, approaching the two-year mark, the policy architecture is largely in place. The harder question — whether bricks and mortar will follow — is only beginning to be answered.

What actually changed: the NPPF revision and the return of mandatory targets

The December 2024 NPPF revision was the centrepiece of Labour's early planning agenda. Its core changes were unambiguous in intent.

First, the standard method was revised upward. The new formula — which places greater weight on housing affordability ratios and the need to rebalance supply toward high-demand areas — produced noticeably higher targets for many southern English authorities. London's target increased substantially. Several Home Counties districts found their annual requirements revised up by 30–50% compared to the figures they had been working to under the previous policy. For planning teams already stretched thin, that was a significant jolt.

Second, the tilted balance — the planning presumption in favour of sustainable development that applies when a council cannot demonstrate a five-year housing land supply — was reinstated in full. This matters commercially. Developers and their land teams understand that a weak five-year supply position opens the door to speculative applications on unallocated sites, with the presumption sitting in the applicant's favour at appeal. REalyse planning data has tracked a measurable uptick in speculative outline applications across local authorities with known supply shortfalls since Q1 2025, particularly in the South East, East of England, and parts of the East Midlands.

Third, Local Plans were given a firm deadline. Councils without an adopted plan face increasingly limited ability to resist development they might otherwise seek to block. The Planning Inspectorate's examination pipeline has grown accordingly, and REalyse data shows an increase of roughly 25–35% in the volume of strategic site allocations entering the examination stage across England over the twelve months to mid-2026.

Grey belt: a new land category that is already reshaping site viability

One of Labour's most distinctive policy contributions has been the introduction of the "grey belt" — a sub-category of Green Belt land that is lower in landscape quality, often consisting of previously developed land, degraded scrub, or land poorly connected to the purposes the Green Belt is meant to serve.

In practice, grey belt designation gives developers a new route to argue that Green Belt release is justified, without needing a full Green Belt review. Applications on grey belt land are expected to benefit from a presumption in favour of development, subject to the "golden rules" — a package of requirements including a minimum 50% affordable housing provision, investment in local infrastructure, and access to green space.

The policy is still being tested through the planning system. Some local authorities have embraced grey belt mapping as a way to direct development to genuinely low-value land while protecting high-quality countryside. Others have resisted, challenging the methodology or disputing designations.

For developers and investors, grey belt land represents a meaningful opportunity — but one with real complexity. REalyse data covering planning applications on sites within or adjacent to Green Belt across the South East, East of England, and Home Counties shows a significant increase in applications referencing grey belt criteria since early 2025. Viability, however, remains the central issue: the 50% affordable housing requirement materially affects residual land values, and in many cases, development appraisals are finely balanced depending on local authority CIL rates, infrastructure costs, and the achievable private sale price per square foot for the scheme.

In areas where REalyse comparable data shows achieved sale prices above £500–550 per square foot, grey belt schemes can often support the golden rules requirements and still generate acceptable developer returns. In lower-value markets — particularly parts of the Midlands and the North — the arithmetic is tighter, and grey belt is unlikely to unlock significant volume without additional subsidy or grant support.

Early council signals: compliance, resistance, and the Local Plan crunch

Two years in, the picture at local authority level is mixed.

A cluster of ambitious authorities — many of them in areas with strong political alignment with the government and acute affordability pressure — have moved quickly to update their Local Plans and adopt higher housing targets. These are disproportionately concentrated in Greater London, the East of England, and parts of the South West. REalyse planning pipeline data for these areas shows a corresponding increase in large-scale residential permissions granted or in progress, with total consented units in some districts running 20–30% ahead of their five-year rolling averages.

Elsewhere, the picture is more fraught. A number of district and borough councils have delayed Local Plan updates, challenged the standard method outputs, or sought to argue exceptional circumstances that justify lower targets. Some of this resistance is genuine — councils in areas of significant environmental constraint, such as flood plains or protected landscapes, face real delivery challenges. But some of it reflects political reluctance rather than technical impossibility.

The Planning Inspectorate is under pressure. The number of examinations in progress has grown significantly, and there are well-documented concerns about examination timescales stretching to 18–24 months in complex cases. Labour's pledge to recruit 300 additional planning officers nationally is a welcome measure, but in a market where experienced planners are scarce and local authority pay often struggles to compete with the private sector, translating headcount commitments into real capacity has proven slower than anticipated.

Developer sentiment, as captured in industry surveys through early 2026, reflects this uncertainty. Many major housebuilders report that planning remains the single largest constraint on their ability to increase output — ahead of labour costs, materials, and mortgage market conditions. Build rates are recovering from the 2023–24 trough, but the pace of recovery is uneven. REalyse data on new-build transaction volumes across England's key growth corridors — the Oxford-Cambridge Arc, the M11 corridor, and parts of the West Midlands — shows that permissions are accumulating faster than completions, pointing to a growing gap between consented capacity and actual delivery.

What the data says about housing delivery: 2026–2029 outlook

The government's 1.5 million homes target across the Parliament implies an annual build rate of approximately 300,000 net additions. England has not consistently achieved 300,000 completions in a single year in the post-war period. Even at the peak of the pre-financial-crisis boom, annual completions rarely exceeded 220,000. The ambition is, on any historical reading, stretching.

REalyse planning pipeline data — which tracks applications submitted, permissions granted, starts on site, and completions in progress across England — suggests that the consented pipeline is building. The flow of new permissions has improved since the NPPF revision, and strategic sites that stalled under the previous policy environment are beginning to move again. However, the lead time from outline permission to first completion on large sites typically runs to three to five years even in favourable market conditions. That means many of the permissions being granted today will not translate into completed homes until 2028–2030 at the earliest.

For investors and developers monitoring the market, this creates a clear set of implications. Areas with strong existing planning pipelines, supportive local authorities, and credible infrastructure programmes are likely to see meaningful new supply entering the market from 2027 onward. In those locations — many of which are identifiable today through REalyse's planning and development data — the risk of oversupply is real and should factor into appraisal assumptions, particularly for smaller flatted schemes competing against larger strategic sites.

Conversely, in markets where the planning position remains constrained — whether through council resistance, infrastructure limitations, or viability challenges — undersupply is likely to persist, supporting both rental yields and capital values for existing stock.

Conclusion: reform is real, delivery is the test

Labour's planning reforms are substantive. The reintroduction of mandatory targets, the NPPF revision, the grey belt classification, and the Local Plan deadline all represent genuine structural changes to the English planning system — not cosmetic adjustments.

But planning reform and housing delivery are not the same thing. The machinery of the planning system is moving, permissions are accumulating, and strategic sites are being unlocked. Whether that translates into 1.5 million homes by the end of the Parliament depends on factors that policy alone cannot resolve: construction capacity, viability at scale, infrastructure funding, and the appetite of private and institutional capital to invest in residential development at the volumes required.

For property professionals, investors, and lenders, the next 18–24 months will be the critical proving period. The signals from REalyse's planning and development data will be an early indicator of whether the pipeline is translating into starts on site — and where the opportunities and risks are concentrating.