The new Labour government is set to unleash a wave of pro-development planning reforms, promising to shake up the UK’s housing market and potentially create a boom for those who build.

A New Era for Housing?

Labour’s landslide victory has brought a new focus on addressing the UK’s chronic housing shortage. Prime Minister Sir Keir Starmer is wasting no time, with plans to implement sweeping changes to the planning system as early as this weekend.

The changes are ambitious and could have a significant impact on the property market:

Unlocking Land, Unleashing Development

• Reviving House Building Targets: Local councils will face renewed pressure to meet house building targets, previously watered down by the Conservative government.
• New National Planning Policy: The National Planning Policy Framework is set for a major overhaul, with a strong bias towards development.
• Targeting the Greenbelt: Labour is expected to unlock development in so-called “grey belt” areas – those areas of land protected by the Greenbelt but considered ugly and underutilised.
• The Towns Bill: This bill aims to empower local authorities to compulsorily purchase land, paving the way for new towns and urban extensions.

Boosting Development, Cutting Costs

• Land Value Cap: The government is exploring a cap on the value of undeveloped agricultural land, making it easier and more affordable for local authorities to acquire land for development. This could be a game-changer for large projects.
• Planning Officer Boost: To handle the influx of new development, Labour plans to fund councils to hire an extra 300 planning officers, addressing a long-standing staffing shortage in planning departments.

A Developer’s Delight?

The stock market is already reacting to the news. Shares in major UK housebuilders like Vistry, Persimmon, Barratt, and Taylor Wimpey have seen a surge, indicating a strong sense of optimism.

Matthew Tucker, a senior associate at Burges Salmon, a law firm advising property developers, believes these changes have the potential to be transformative: “Land value is at the heart of quite a few of the changes that are in the pipeline. If we’re talking about unlocking chunks of the greenbelt, then the impacts of that on land values will, in my view, be very significant.”

Big Targets, Big Challenges

Labour’s target is ambitious: they aim to build 1.5 million homes during the next Parliament. This echoes the Conservatives’ old target of 300,000 homes per year, but Labour insists they will actually achieve it.

However, experts warn that even with these changes, achieving such ambitious targets won’t happen overnight. It will likely take years to see a significant increase in new home construction.

The Bottom Line

Labour’s pro-development policies are a signal that the UK housing market is about to undergo a major shift. For property developers and investors, this could present a significant opportunity to capitalise on a new era of construction and growth. But, as with any significant change, there will be challenges and complexities. Careful planning and a keen eye on the market will be essential for navigating this new landscape.