The government is right to state a clear and ambitious target of building 1.5 million new homes in this parliament.
Increasing housebuilding, particularly in and around the UK’s biggest cities, will make it easier for people to live in places that offer opportunities to earn higher wages and pave the way for achieving the government’s growth mission.
The UK economy needs a way out of the stagnation that has plagued it for nearly two decades, and more housebuilding is a key part of the solution.
To turn its housebuilding target into new homes, government needs to make changes to the planning system. The government knows this and has been making tweaks since it came into the office. The next opportunity for further reform is this month when the Planning and Infrastructure Bill comes before parliament.
For 75 years the UK has been adding new homes at a far lower rate than similar G7 countries and its unusual planning system is key to understanding why. Since the UK switched to a discretionary planning system with the 1947 Town and Country Planning Act, housebuilding rates have fallen steadily leaving us with 4.3 million fewer homes than we would have if we kept pace with comparable European countries.
Reform of the UK’s planning rules to limit the amount of discretion local planners and councils have over every individual new development would make building new homes more predictable and less costly.
Most countries like the UK – such as New Zealand and France – have this type of rules-based zoning system and have far better housebuilding outcomes as a result.
Under this system, a planning application that meets all the pre-determined rules and designations is guaranteed to be granted permission.
Recent reforms in other countries show what’s possible with a more rules-based system. Under prime minister Jacinda Ardern in 2021, the New Zealand government made several changes to planning to make it easier to build multi-family, multi-storey housing in every available plot in the country’s five largest cities. The year after these reforms in 2022, housebuilding at a national level reached the highest rate for decades.
Were the UK to adopt this system, there is no doubt it would build more.
To get this kind of once-in-a-generation increase in housebuilding, the UK needs to adopt a similarly bold approach. The UK government’s growth mission depends on it.
What should the government do?
It has already made changes to the National Planning Policy Framework, set new, mandatory housebuilding targets for local areas in England, and reformed green belt policy. This will make the process of planning new housing much more predictable.
If it also implements the National Development Management Policies this would be the first step to implementing a consistent national rulebook for planning.
In the Planning and Infrastructure Bill, the government is considering reforms that would reduce the number of circumstances when planning applications must be approved by local councillors after a local planning committee has made its verdict. If it adopts the bolder option – ‘Option 3’ as set out in its recent consultation – this would make the overall system much more rules-based.
Local oversight of the impact of new developments is important but this can be streamlined by ensuring it takes place upstream of individual planning applications.
To do this, new legislation should replace the requirement for planners to have regard for ‘material considerations’ in the planning process with a duty to establish ‘material designations’ that set standards for all planning applications to follow.
The resulting system would provide places with flexibility to have their say in local development by overlaying their own designations on top of the national rulebook. It would be a major step towards replacing our discretionary planning system with a rules-based zoning system that would produce better housing outcomes, as we see in many other countries.
The government is right to go for growth. Its 1.5 million housebuilding target shows genuine recognition of the scale and nature of the UK’s economic challenges. It now has a big opportunity here for bold reforms to help it achieve it.
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