State Of The Market Special: Labour’s First Steps Towards Getting Britain Building Again
CrowdProperty
The UK's leading specialist property development lending platform. Together We Build.
The King's Speech on 17 July laid out Labour's immediate priorities, with a strong focus on transforming the UK’s planning and infrastructure landscape. Among these is the "Planning & Infrastructure Bill," designed to overhaul the planning system to support growth. With measures to expedite infrastructure projects, modernise local planning committees, and reintroduce compulsory housebuilding targets, Labour is determined to get Britain building. This special update delves into Labour's significant housing and infrastructure proposals and what they mean for developers.
Planning & Infrastructure Bill
One of 40 Bills shared in The King’s Speech on July 17, the Bill is designed to accelerate infrastructure delivery and make the UK planning system “an enabler of growth.” Underpinned by widespread planning reform, the legislation proposes enabling new or updated National Policy Statements to be reviewed every five years.
Labour also plans to ramp up housebuilding activity by modernising local planning committees, who will reportedly be able to determine ‘how’ not ‘if’ new homes and infrastructure can be built. Meanwhile, additional resources have been promised in the form of 300 new planners.
More schemes will be labelled as Nationally Significant Infrastructure Projects and be given final approval by the housing secretary as opposed to local councils, in an effort to prevent important projects from being delayed by red tape. Changes to the National Policy Framework are also reportedly in the pipeline and due to be announced within a matter of weeks. According to media reports , the changes will involve allowing councils to approve housebuilding applications in grey belt areas.
The Bill will also make it easier for government bodies to issue compulsory purchase orders on undeveloped land and, in a move that has generated much discussion and debate, compulsory housebuilding targets will be reintroduced.
?
Compulsory Housebuilding Targets?
?
During her first speech as Chancellor of the Exchequer, Rachel Reeves announced mandatory housing targets will be reintroduced as part of Labour’s vision to build 1.5 million homes over the next five years.?
According to recent media reports , the targets will be population-based and introduced by the autumn following a short period of consultation this summer. Compulsory housing targets for local authorities were scrapped by Levelling Up Secretary, Michael Gove, last year due to them not receiving full backing from the Conservative Party. ??
?
Land Value Capture?
?
Proposals to reduce the price of land and generate more money for affordable housing and infrastructure have been labelled as being among the most contentious of Labour’s plans to have been unveiled so far. When councils approve land for building, its value increases. For example, farmland can increase from ￡22,520 to ￡6.2 million per hectare. Land Value Capture (LVC) ensures that the increase in land value benefits the community by funding public projects like social housing, schools, and health clinics, instead of just enriching landowners. Currently, two main policies support LVC:
Back in 2018, the Conservatives called for a dedicated LVC policy; an idea that Labour are reportedly said to be keen to resurrect.
?
Mike Bristow, CEO of CrowdProperty, comments:
?
“We could be about to embark on a golden era for property development in the UK. If that doesn’t happen, then Labour will fail in their lofty housebuilding targets, especially given the lead indicators of housing starts and planning approvals already pointing to poor delivery through to the end of 2025.
“Absolutely critical to getting anywhere near 1.5m homes will be the small and medium sized developer, who can access, develop and make profit from the abundant small and medium sized sites throughout the UK. The Government must take measures to support the entrepreneurial grass roots of housebuilding.
“This ambition is supported by a significantly less uncertain macro picture, property supply and demand dynamics that will go further than supporting house prices – in fact likely drive them up.
领英推荐
Mike continues:
“The market environment is stronger than it has been for years – developers should develop with confidence when finding the right sites. This is a sentiment that is supported by progressive developers who are already out there hunting and agreeing purchases of sites – we’ve seen a record ￡1.7bn worth of finance applications in the last 4 months alone.
“Developers should get cracking on progressing their finance applications, as surveyors, solicitors and other property professionals are going to get very busy soon. Get ahead of the September rush to avoid delays to the start dates and beat the post-summer surge that will likely see valuation quotes and solicitors’ fees go up as demand outstrips supply of these services. Progressing things as far as they can now will serve developers well come the end of the summer.”
?
Other Headlines:
?
Bank Rate Cut Remains To Be Seen
Speculation that the Bank of England will keep the bank rate at 5.25% when it next meets in August continues to mount. With inflation staying at 2% since June, the cost of living continues to rise.
?
UK Employment Figures Show Annual Rise
?
Latest figures published by the National Office for Statistics have revealed that the number of payrolled employees rose by 0.8% compared with June 2023, a rise of 241,000 employees. The annual increase was largest in the health and social work sector, a rise of 161,000 employees.
?
Post-Election Peak For Housing Market
?
Recent research has found that the number of new instructions peaked following the General Election. In the seven days immediately following the election, the number of sellers entering the market totalled 48,486.
-----------------
Want To Get Building?
?
If you are a SME property developer looking to level up the success of your projects, join us at the UK PropDev Conference 2024 on 23 October at the Crowne Plaza in Birmingham. Find out more here .