Housing targets

The government has announced an ambitious target to accelerate housebuilding and deliver 1.5 million homes over the next five years. The plans will see councils given mandatory targets to build, cutting housing shortages and boosting economic growth. The UK’s business groups have welcomed changes to the planning framework as good for investment and small businesses. Here we take a look at the National Planning Policy Framework (NPPF).

The NPPF

Under the plans, councils will be told they must play their part to meet housing need by reaching a new ambitious combined target of 370,000 homes a year.

This followed Prime Minister Keir Starmer announcing a plan that sets out the government’s milestone of delivering 1.5 million new homes over five years.

Areas with the highest unaffordability for housing and greatest potential for growth will see housebuilding targets increase, while stronger action will ensure councils adopt up-to-date local plans or develop new plans that work for their communities. 

The government also announced a new ‘common-sense approach’ to the greenbelt. While remaining committed to a brownfield first approach, the updated NPPF will require councils to review their greenbelt boundaries to meet targets, identifying and prioritising lower quality ‘grey belt’ land.

Growth-friendly direction

According to think tank the Resolution Foundation the government’s changes to the NPPF should help deliver more homes in areas with the most economic potential, as well as in areas with acute affordability challenges.

It says the government is right to loosen planning rules in order to increase housing supply, the Foundation had cautioned that the pre-consultation national planning policy framework wasn’t focused enough on building homes where they are most likely to boost growth.

However, it warns that major cities like Birmingham, Manchester and Sheffield are in danger of missing out.

The Foundation notes that Britain’s major cities outside London have middling levels of productivity, but also huge potential for growth through agglomeration – especially given the UK’s strengths in services industries. They should be more of a priority in the government’s housebuilding agenda, advises the Foundation.

Changes can boost investment

The British Chambers of Commerce (BCC) has welcomed the release of the updated NPPF as ‘good news’.

The BCC says it will remove ‘blockers to development’ and speed up the planning process helping to boost investment, opportunities and growth.

Jane Gratton, Deputy Director of Public Policy at the BCC, said: ‘None of this should be viewed in isolation, we need integrated plans which allow firms to grow in the right locations so they can meet net zero goals and improve efficiency. 

‘These initial changes are promising but we need to see action quickly. We can’t afford more dithering and delay. A clear timetable is needed for implementation and more skilled planners to deliver it at pace. Business wants to help, and our private sector-led planning skills fund will train at least 100 new planners to work in councils over the next few years.

‘The proof of success will be judged by whether the reforms deliver for people, business and the economy.’

Small housebuilders can play key role

The Federation of Small Businesses (FSB) says the government should publish a Small Housebuilder Strategy to support the sector to achieve its potential in contributing to housebuilding targets.

Tina McKenzie, Policy Chair at the FSB, said: ‘It simply cannot happen with a focus purely on larger volume builders, who cannot efficiently address the smaller sites needed to achieve the target number of new homes. The only way government can hit these targets is to involve and utilise the nation’s army of small housebuilders. 

‘This targeted strategy needs to include support to build on brownfield and grey belt sites via a development relief fund; moving Community Infrastructure Levy funding costs to later in the project to protect cash flow; and protections against the scourge of late payments made worse by retention payments in the sector. Supporting the increased use of project bank accounts would be beneficial, getting small firms paid quickly once the job is complete.

‘Now is the time to build a durable approach to help small housebuilders deliver.’