BLOGS

The UK government has rarely set a housing target with more political conviction — or more structural obstacles standing in the way. The commitment to deliver 1.5 million homes over five years, equivalent to 300,000 a year in England alone, has driven a cascading series of planning reforms that are now arriving simultaneously: a revised National Planning Policy Framework (NPPF), the Planning and Infrastructure Act 2025, a new plan-making system, and tightening consequences for local authorities that fail to demonstrate adequate land supply.

The result is a planning environment under genuine pressure. The rules are changing. The deadlines are real. And the gap between ambition and delivery has never been more starkly visible in the data.

A system in the middle of a reset

The Planning and Infrastructure Act 2025, which received Royal Assent on 18 December 2025, is the legislative centrepiece of Labour's housing delivery agenda. It reintroduces strategic planning through Spatial Development Strategies, gives councils new powers on planning fees and reinvestment, and includes a nature restoration levy scheme. Alongside it, a revised draft NPPF consulted on between December 2025 and March 2026 — described by commentators as "the most significant update since the NPPF's introduction in 2012" — proposes the introduction of National Development Management Policies (NDMPs), a strengthened brownfield-first approach, and new provisions for so-called "grey belt" land.

Grey belt is central to the government's growth narrative. It allows development on lower-quality Green Belt land, subject to "golden rules" requiring up to 50% affordable housing, adequate infrastructure, and accessible green space. For landowners and developers sitting on land adjacent to established settlements, it represents a meaningful shift in the risk-reward calculation of promoting sites.

The new plan-making system, with regulations coming into effect in March 2026, sets out a 30-month timetable from commencement to adoption — considerably faster than the current system's average. Local planning authorities (LPAs) that do not intend to submit under the existing regime must give notice of intent to commence new-system plan-making by 31 December 2026. For those already holding adopted plans more than five years old, the formal commencement backstop falls on 30 April 2027.

The local plan coverage problem

The pressure to move fast is acute, because most of England currently has no up-to-date local plan in place. As of mid-2026, only around 90 of approximately 300 English LPAs — just 30% — have an adopted plan that meets current standards, according to Savills Research. That means roughly 70% of planning decisions in England are made without the policy certainty that an up-to-date plan provides. In those areas, councils find themselves with significantly reduced ability to resist development that meets national policy criteria, a position the government has engineered deliberately.

An additional 20% housing delivery buffer, activated from 1 July 2026 for authorities with out-of-date local plans, increases the practical exposure further. REalyse data shows a 25–35% increase in the volume of strategic site allocations entering the Planning Inspectorate's examination pipeline across England over the twelve months to mid-2026, a direct consequence of developers pressing their advantage in areas without current plan coverage.

The government has backed this agenda with at least £29 million in direct funding to 188 LPAs to accelerate plan-making, with a further £14.1 million available for the 2025–26 financial year. But funding a faster process does not automatically resolve the political and technical complexity of choosing where to build.

The delivery gap: stark numbers, structural causes

Against this reform backdrop, the actual delivery figures are arresting. Building control data from BCIS shows that housing completions in England for 2025–26 totalled approximately 143,110 — the lowest level since 2015–16 — even as starts rose 15% to around 130,170. EPC-based estimates from MHCLG suggest around 204,500 net new homes were delivered in England in the year to Q1 2026, barely two-thirds of the 300,000 annual target. Savills projects that completions in 2026–27 are unlikely to exceed 160,000–170,000 even with the current recovery in starts, given the 12–24 month lag between ground-break and habitation.

Planning consents tell the supply-side story most sharply. The number of homes gaining planning consent fell to around 186,000 in the year to March 2026 — 45% below the 2017 peak, itself insufficient to meet the government's targets. HBF data shows new planning consents down approximately 39% in three years to around 180,000 in 2025, a figure that structurally limits the completions pipeline for 2027 and beyond.

RICS sentiment data underscores why delivery has not responded more quickly to the volume of legislative activity. The RICS UK Construction Monitor for Q1 2026 recorded a headline workloads net balance of -12%, down from -6% in the previous quarter, with private housing workloads particularly weak at -19%. RICS Chief Economist Simon Rubinsohn was direct: "any pick-up in housing development is likely to be relatively modest and way short of what would be required to get anywhere near approaching the 1.5 million home target. While the passage of the Planning and Infrastructure Bill is seen as helpful for housebuilders, on its own it is not going to be sufficient to meaningfully move the dial."

Construction cost inflation continuing to run ahead of tender price growth, persistent viability challenges, and skills shortages — particularly in building control surveyors and quantity surveyors — compound the structural picture. Falling mortgage rates improved buyer affordability through early 2026, but the RICS UK Residential Market Survey for March 2026 recorded new buyer enquiries at a net balance of -39%, while April's survey described a market "still in the grip of macro headwinds" from elevated borrowing costs and geopolitical uncertainty.

What the data means for investment and development decisions

For investors and developers, the reform environment creates a two-speed landscape. In areas where local plans are out of date and housing land supply is demonstrably short, national policy now actively favours development. The five-year housing land supply test has real teeth, and a growing body of appeal decisions at the Planning Inspectorate reflects that. REalyse planning data shows meaningful uplifts in application volumes in districts with sub-standard local plan coverage — particularly in the South East, East of England, and parts of the East and West Midlands — where green belt pressure and demographic demand have historically clashed with restrictive local policy.

For those investing in existing stock, the planning reform cycle matters too. REalyse comparables data suggests that sites coming forward in grey belt-adjacent locations are beginning to attract closer scrutiny from land and development teams, with early-stage site appraisals incorporating both revised GDV assumptions and the viability impact of the golden rules' affordable housing requirements. The requirement to deliver up to 50% affordable housing on grey belt sites is not trivial: it compresses the margin available to private developers and puts the onus on getting land value assumptions right from the outset.

The devolved picture: a different set of trade-offs

Beyond England's NPPF reform cycle, the devolved nations are navigating housing delivery pressures through distinct frameworks — with instructive results.

In Scotland, the Affordable Housing Supply Programme targets 110,000 homes by 2032, backed by a £4.9 billion commitment from the Scottish Government for the period April 2026 to March 2030. Scotland's approach — allocating approximately 99% of its housing investment to affordable supply — contrasts sharply with England's 53% share, according to the Chartered Institute of Housing's 2025 UK Housing Review. Scotland abolished Right to Buy in 2016 specifically to protect social housing stock, a policy choice now echoed in English discussions about the reform of the existing scheme.

In Wales, the outgoing Senedd Government committed to delivering 20,000 low-carbon social homes for rent between 2021 and 2026. As of April 2026, cumulative delivery was projected at approximately 18,652 homes — around 93% of the target — with Cabinet Secretary Jayne Bryant expressing confidence that the full 20,304 would be reached by end of 2026, representing "the highest sustained delivery of social housing in Wales in nearly two decades". However, Shelter Cymru estimates that at current rates it would take 35 years to clear Wales' 94,000-household social housing waiting list — underlining how even a near-achieved target sits against a scale of need that renders it relatively modest.

Northern Ireland continues to see firm price growth — with Belfast, Ards and North Down, and Lisburn and Castlereagh among the most active housing markets in mid-2026 — though Northern Ireland's planning framework operates independently of England's NPPF reforms, and supply constraints remain a persistent feature of its residential market.

Across all four nations, the policy conclusion is the same: planning reform is necessary but not sufficient. The workforce, the grant funding, the viability mathematics, and the mortgage market all need to move in the same direction at the same time.

What happens next

The next twelve months will be a defining period. The final revised NPPF is expected from MHCLG in summer 2026. Regulations underpinning the new plan-making system are now in effect, and the December 2026 submission deadline for existing-system local plans creates a genuine forcing function for councils still hedging on plan preparation. The Planning Inspectorate's examination pipeline is growing, and political tolerance for under-delivering LPAs is diminishing.

For developers and investors, the implication is clear: understanding planning policy at the local level has never been more commercially important. The difference between an authority with an up-to-date plan, an adequate five-year land supply, and a track record of timely consents, versus one without all three, now maps almost directly to the risk premium built into site appraisals and acquisition prices. REalyse planning pipeline data, cross-referenced with active and historical listings, transaction comparables, and rental yields, gives market participants the granular local visibility needed to navigate this fast-moving landscape.

The government has pulled every available lever. Whether the sector can respond at the required pace — given cost pressures, skills constraints, and a still-cautious mortgage market — is the question that will define housing delivery through the remainder of this parliament.