BLOGS

A three-part policy reset lands at once

Rarely do three structural planning and construction policies land in the same 12-month window. Yet that is precisely the position UK residential developers find themselves in during 2026. The government has confirmed seven new town locations — Tempsford, Crews Hill & Chase Park, Leeds South Bank, Manchester Victoria North, Thamesmead, Brabazon & the West Innovation Arc, and an expanded Milton Keynes — each expected to deliver at least 10,000 homes, with several running to 40,000 or more over the coming decades.

Alongside this sits a live consultation on moving planning application fees away from a single national schedule towards local cost-recovery, potentially allowing individual councils to set their own charges. And from 2028, the Future Homes Standard will make solar PV (covering roughly 40% of a dwelling's ground-floor area) and low-carbon heating mandatory on new homes in England, effectively ending gas connections for new build.

For institutional investors, lenders and developers, none of these sit in isolation. Each touches site appraisal, GDV assumptions and delivery timelines, and together they mark the most significant reset to housebuilding economics since the 2018 viability reforms. REalyse's planning and transaction data can help quantify what's actually at stake as the sector recalibrates.

Seven new towns: a pipeline concentrated in a handful of corridors

The scale of the new towns programme is substantial on paper — potentially 200,000-plus homes across the seven sites — but delivery will be uneven. Tempsford (Bedfordshire) and Brabazon & West Innovation Arc (South Gloucestershire) are each pitched at up to 40,000 homes, anchored respectively to the East West Rail interchange and an advanced engineering economy; Milton Keynes's "renewed town" expansion adds a further 40,000 on top of existing stock. Leeds South Bank and the Enfield and Greenwich sites are smaller but more immediately deliverable, tied to existing transport investment (a £2.1bn local transport commitment in Leeds, a Docklands Light Railway extension for Thamesmead).

REalyse's planning pipeline data already shows where large-scale residential activity is concentrated ahead of these announcements. Looking at major residential schemes (50+ units) submitted over the past three years, Central London, Essex, Kent, Greater Manchester and Hertfordshire carry the heaviest volumes of proposed units — with Central London alone showing close to 99,000 units in the pipeline across roughly 220 major applications, and Essex close behind at over 61,000 units. Approval rates vary widely by area: Central London schemes clear at around 40%, against closer to 17-18% in Essex and Cheshire, illustrating how local planning committee behaviour is already a bigger swing factor for delivery timelines than most headline unit-count announcements suggest.

This matters for how investors read the new towns programme. Bedfordshire (Tempsford) and South Gloucestershire (Brabazon) currently show comparatively modest major-scheme pipelines relative to London and the South East — meaning these locations are starting from a lower delivery base, with fewer existing comparables to underwrite against. For lenders assessing collateral in these emerging growth corridors, early-stage land value assumptions will carry more uncertainty than in established high-volume markets until a track record of granted, under-construction schemes builds up.

The government's parallel commitment of up to £16bn through the new National Housing Bank, aimed at unlocking 500,000+ homes and £53bn of private co-investment, is the mechanism intended to close this gap — but funding availability and site-level deliverability are two different tests. British Property Federation's response to the announcement flagged the "current viability crisis" directly, underscoring that site selection alone won't resolve underwriting risk.

Locally set planning fees: a new variable in site appraisal

The consultation on planning fees, open until 18 May 2026, proposes a National Default Fee Schedule set at 90% of estimated processing costs, with local planning authorities then able to vary fees above this where justified — addressing what the government estimates is a £330m annual shortfall in fee income nationally. Major Section 73 applications and condition-discharge applications were flagged by 92% of surveyed councils as the most underpriced categories today, with current fees covering as little as 57% of actual processing costs in some cases.

For developers running multi-site pipelines, this is a shift from a predictable, uniform cost line to a variable one. A scheme in a well-resourced, efficient authority may see only modest fee increases; the same scheme type in an under-resourced authority could face materially higher charges, particularly for major applications and Section 73 variations often used to renegotiate viability or design post-consent. Combined with existing regional disparities in determination speed — REalyse's planning data shows a wide spread in the ratio of "in progress" to "granted" applications by area, with authorities like Essex, Kent and Leicestershire carrying particularly large backlogs relative to decisions issued — due diligence on local authority planning performance is becoming as important to site selection as the underlying land value.

Developers and lenders assessing acquisition targets across multiple local authorities should treat local fee-setting as a live line item in appraisal models from 2026 onward, not a rounding error, especially for schemes reliant on Section 73 flexibility during the build-out phase.

The 2028 solar mandate: a viability and comparables question

The Future Homes Standard's confirmation — solar PV equivalent to 40% of ground-floor area, plus mandatory low-carbon heating, in force from 24 March 2027 with a transition to full compliance by 24 March 2028 — is the most consequential build-cost change in over a decade. Government estimates put the added build cost at around £10,000 per home, offset by projected energy bill savings of roughly £830 a year versus a standard EPC-C home.

For viability appraisals, this cuts two ways. On the cost side, £10,000 per unit compresses margins on schemes already navigating Biodiversity Net Gain contributions (typically £15,000-£25,000 per biodiversity unit) and rising planning fees. On the value side, early evidence suggests solar-equipped new build can command a premium — some studies cited in the sector put this as high as 3-4% versus comparable stock without solar — and REalyse's sold price per square foot data shows just how wide the regional gap in achieved values already is, ranging from roughly £144/sqft for terraced stock in the lowest-value region up to over £655/sqft for flats in the highest-value London market. Where a scheme sits within that spread will heavily influence whether the added compliance cost is comfortably absorbed or genuinely tests the numbers.

Schemes with planning applications submitted before 24 March 2027 and construction commencing before 24 March 2028 retain transitional protection under the old Part L standard — creating a clear incentive for developers with sites in the pipeline to accelerate submission and start-on-site dates ahead of the deadline. For lenders, this also widens the gap between new build and existing stock: post-2028 completions will arrive with materially stronger EPC ratings and lower running costs than most of the current resale market, a divergence worth building into loan-to-value and rental yield assumptions on both new build and older stock over the next two to three years.

Outlook: three policies, one appraisal spreadsheet

New towns, local fee-setting and the solar mandate are separate consultations on paper, but they land on the same viability model in practice. Sites in the seven new town locations will need to absorb higher and less predictable planning costs while meeting tighter carbon requirements from 2028 — at the same time as institutional capital via the National Housing Bank is meant to de-risk delivery. Whether that combination accelerates or slows the pipeline will likely vary sharply by region, authority and site readiness.

For developers, lenders and investors, the practical takeaway is to treat this as a data problem as much as a policy one: benchmarking local authority approval rates and processing times, tracking achieved £/sqft and yield by property type across target new town corridors, and stress-testing GDV against both fee variability and the FHS cost uplift. REalyse's planning, transaction and comparables data are built precisely for that kind of scenario testing as the 2026-2028 window plays out.