Government Announces Planning Overhaul To Meet New Housing Targets

The government has announced that all local councils in England will be given mandatory housing targets in order to deliver 1.5 million new homes by 2029. This confirms its commitment “to get Britain building” as set out on the opening of parliament. In this article, we examine the new planning proposals and other new legislation we can expect to directly or indirectly impact the residential property market in the coming months.

Deputy prime minister Angela Rayner introduced the government’s planning “revolution” by saying Britain is facing “the most acute housing crisis in living memory”. She said the UK’s housing target will increase to 370,000 a year, a steep rise from the 200,000 new homes predicted to be built this year. Despite this, the target for London will reduce from what Ms Rayner described as a “nonsense” target of 99,000 new homes to 80,000.

How will the new housing targets be met?

1. The government will make it easier to build on low-quality green belt land, which will be reclassified as “grey belt”. This will include land on the edge of existing settlements or roads, as well as old petrol stations and car parks. Development on grey belt land will be subject to new “golden rules” requiring a provision of 50% affordable housing, with a focus on social rent. The rules will also require increased access to green spaces and appropriate infrastructure, such as schools and doctors’ surgeries.
2. If local authorities do not have up-to-date plans or fail to enable sufficient new housing to meet local targets, housebuilders can bring forward proposals to build on grey belt land.
3. Local housing targets will become mandatory for the first time rather than advisory. New rules will change the standard method used to calculate housing needs so that it better reflects the urgency of supply in local areas. This new method will require local authorities to plan for homes proportionate to the size of existing communities. Councils will also have to review their green belt if needed to meet housing targets.
4. The government has committed to “go further in building genuinely affordable homes”. It says part of this must come from developers, and the housing minister will meet the major developers so that they “commit to matching our pace of reform”. In addition, there will be changes to Right to Buy, giving councils more flexibility to build and buy more social homes.

What other new legislation affecting the residential property market can we expect?

In our article, King’s Speech confirms new government will ban ‘no-fault’ evictions and reform leasehold property, we wrote about new legislation that will affect the rental market and planned changes to the “feudal” leasehold system.

In its pre-election manifesto, the Labour Party made other pledges should it win the election, and we can expect these to be introduced in the near future. These include:

1. The stamp duty nil rate band for first-time buyers will revert to £300,000 from the temporary level of £425,000 introduced in November 2022. The Conservative government had planned to make this change permanent. Overseas buyers will also pay a 1% stamp duty surcharge.
2. The Labour Party did not rule out increasing capital gains tax (CGT), and if it does, this could impact landlords. It has said, however, that it will not charge CGT on primary residences. Any changes to CGT could be introduced in the new government’s first budget.
3. The manifesto pledged to abolish non-dom status in order to address unfairness in the tax system. It says it will also end the use of offshore trusts to avoid inheritance tax so that everyone who lives in the UK pays their tax here. Having said that, the government will be cautious about driving wealthy individuals from the country, so it is likely to proceed with caution.

We will keep you updated as and when the government makes further announcements that could affect the residential property market. In the meantime, if you have any residential property queries, please contact Daniel Broughton at dbr@portner.co.uk.