Tim Foreman, managing director of land and new homes at LRG, and Lawrence Turner, director at Boyer, discuss how likely it is that the target is reached
Last year’s headlines painted a somewhat bleak picture for the housebuilding industry. Targets looked set to be missed, completion rates were falling, and even the prime minister admitted the goal was “a little too ambitious“.
But the mood has shifted in 2025. The government now insists it will hit its 2029 housebuilding target ahead of the next election, and the secretary of state Angela Rayner has made Labour’s position clear: there are “no excuses” for failing to deliver the 1.5m new homes promised in the manifesto.
There are signs of optimism from within the industry, too. A recent survey by Shawbrook found that 3 out of 5 developers believe achieving the government’s 1.5m homes target will be “easy”. However, with just four years remaining, several challenges must be tackled for the sector to stay on track and meet the target.
Planning challenges
Of course, with an increase in building comes an increase in planning challenges. With the number of homes permitted by local authorities at the lowest level in over a decade, Keir Starmer will, as he said, face an “almighty challenge” in delivering housebuilding targets.
However, the Government’s response to planning reform has been swift. Since July last year, we have seen significant planning reform in the form of a Written Ministerial Statement setting out ambitions to start building and intervene where local planning authorities do not deliver, an National Planning Policy Framework, uplifted housing targets which have reset the dial for the preparation of local plans, the release of Green Belt land, and a real lean in favour of sustainable development.
The Government’s newly published Planning & Infrastructure Bill also aims to “turbocharge housing building and infrastructure delivery.” In it, we have detailed legislative change to expedite planning decisions on major projects, and tackle the long-standing impediments to our planning system.
This is exactly what the industry has been requesting for more than a decade. It is essential to tackle the housing crisis by allowing the building of more homes and infrastructure far quicker than we have before.
The return of regional planning
Perhaps the most important aspect of the Bill is the requirement for newly established strategic planning authorities (which includes combined authorities, upper-tier county councils, and unitary authorities) to prepare a Spatial Development Strategy. This move essentially reinstates a form of regional planning, which we haven’t benefited from since the abolition of regional spatial strategies and structure plans.
Returning to strategic planning is fundamental to tackling the housing crisis. Over the past 15 years, we’ve learned that meeting the housing needs of local communities is impossible without proper strategic planning. The Spatial Development Strategy is a key tool in achieving this goal.
As promised, the Bill plans to bolster confidence and clarity in the planning system. A persistent issue facing all local planning authorities (LPAs) is under-funding. The Government has highlighted that LPAs are currently burdened by funding deficits estimated at £362m annually.
This financial shortfall results in LPAs often lacking the resources necessary to provide a functional planning service, leading to significant delays in determining applications and providing advice to applicants. This leads to a waning of confidence in the market, with investors often hesitant to commit to brownfield redevelopment projects, which are often the most sustainable sites in towns and cities.
The Bill’s solution to this is to allow LPAs to set their own planning fees. This is something which the Bill promotes as allowing true cost recovery for LPAs, while providing transparency for applicants.
In conjunction with this, the Bill proposes to modernise local planning committees through a national delegation scheme. This aims to simplify decision-making processes and improve the efficacy of planning committees across the board.
Quite often, planning committees are dealing with planning applications that are compliant with a local plan that really ought to be determined under delegated authority by planning officers.
Changes to compulsory purchase orders
The Bill also proposes amendments to the compulsory purchase order (CPO) process, empowering authorities to acquire land for critical projects more efficiently. Changes in the Bill include electronic notifications and a streamlining of processes, with the aim of expediting land assembly – something that is crucial for housing and infrastructure projects.
Whilst undoubtedly the industry will support measures that achieve these objectives, the use of compulsory purchase in practice is minimal and inherently complex. It is, therefore, uncertain whether such reforms would truly be transformational if their overall use remains limited, and whether such reforms will truly have an impact on the appetite of LPAs to utilise these powers.
Another key feature is the introduction of the Nature Restoration Fund (NRF), which will enable developers to address environmental obligations more efficiently. This initiative would allow developers to contribute to a communal environmental fund, which finances Environmental Delivery Plans (EDPs) designed to enhance local ecosystems impacted by development.
The industry would likely welcome better coordination of ecological mitigation measures if it passed the burden of delivering the mitigation to the Government and allowed the industry to pay a levy and continue building.
The Planning and Infrastructure Bill includes many measures announced during the King’s Speech and recent government consultations that have started to address the housing crisis. The Bill builds upon the ambitious agenda set by the Government’s planning reforms and is crucial for meeting the Government’s target of 1.5m new homes before the end of the Parliament.
Workforce and supply chain concerns
During the last decade, the flow of construction workers into the market has dwindled considerably – and once the flow has been reduced to a trickle, it takes more than mere confident proclamations to turn the tap back on.
The sector only has as many workers as work demands, meaning the industry has often been constrained by the planning system itself. Until recently, the capacity of the construction industry has been restrained by the planning system, artificially constraining the supply of new homes. Building up an additional workforce will take time to recruit and train.
The widely discussed skills shortage remains a major concern and has significant potential to hinder progress toward targets. Many in the housebuilding sector are concerned that the government’s well-meaning housebuilding targets will be compromised by an absence of capable workers to deliver.
There is certainly an appetite among developers to increase the number of homes they build, and the recently announced planning reforms should support this. However, there are still grave concerns about labour and material shortages.
We also need to ensure that an increase in quantity does not denote a decrease in quality. While the housebuilding industry heaved a collective sigh of relief when ‘beauty’ was removed from the NPPF, design standards must be retained.
Additionally, stronger support for SME housebuilders, who are at risk of being squeezed out, would be welcome. Overdemand for materials risks smaller housebuilders missing out on vital construction products and as such, threatens their existence – right when they are needed most. While the government has doubled the ENABLE Build scheme to £2bn, support must continue throughout the build process, not just at the beginning.
The role of buyers in meeting targets
Boosting supply is only half the battle. Without buyers, the chain breaks down. From a sales end perspective, it’s encouraging to think that with more housebuilding, the market will offer more choice and, with more chance of finding the perfect home, the ‘want to move’ market segment (as opposed to just the ‘need to move’) will be more inspired to buy.
Yet financial challenges remain a major barrier. High inflation and diminishing affordability have put a strain on buyers’ ability to move. Furthermore, impacted additionally by a new, lower Stamp Duty threshold, first-time buyers will experience greater difficulties in accessing the housing market. The HBF has called for targeted government interventions, which are yet to be responded to.
Without demand to sustain growth, any productivity gains will be in vain.
The road ahead
Labour’s 1.5m homes target is appears achievable on paper, but still faces significant roadblocks. While optimism is creeping back into the industry, deep-seated challenges remain. Planning constraints, workforce shortages and supply chain pressures all pose serious threats to delivery, and without streamlined planning approvals, a stronger labour pipeline, and sustained government intervention, the industry risks falling short once again.
Ultimately, the success of this housing drive will depend not just on policy but on the ability to translate commitments into action, turning political promises into built homes. Whether the sector will break new ground or hit a brick wall remains to be seen.
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