The planning system has long been identified as the single greatest bottleneck to new housing delivery in the United Kingdom. For decades, the tension between the need for more homes and the desire to protect landscapes, communities, and local character has resulted in a system that is slow, unpredictable, and expensive to navigate. The consequences are stark: England alone needs approximately 250,000 to 300,000 new homes per year to keep pace with population growth and household formation, yet delivery has consistently fallen short of this target. In 2024/25, net additions in England reached approximately 228,000 — an improvement on recent years, but still a significant gap. The planning system, with its layers of national policy, local plans, neighbourhood plans, environmental regulations, and political complexity, plays a central role in determining where, when, and how many homes get built.
Recognising this, the government has embarked on the most significant programme of planning reform in over a decade. The revised National Planning Policy Framework (NPPF), published in late 2024 and now taking effect, introduces mandatory housing targets for local authorities, strengthens the presumption in favour of sustainable development, and creates new mechanisms for releasing land — including, controversially, grey belt land within the green belt. Alongside this, the new Infrastructure Levy (IL) is being piloted as a replacement for the existing Community Infrastructure Levy and much of the Section 106 system, with the aim of simplifying developer contributions and ensuring that more value from development flows to local communities. These are profound changes that are beginning to reshape the supply pipeline in tangible ways. This article provides a comprehensive analysis of the reforms, their early impacts, and what they mean for the supply of new build homes through 2026 and beyond.
The Revised NPPF: What Has Changed?
The revised National Planning Policy Framework, which took effect in December 2024, represents the most significant update to national planning policy since the original NPPF was published in 2012. The key changes can be grouped into several major themes, each with direct implications for new build housing supply.
Local authorities now have binding annual housing targets calculated using a standard method. The previous system allowed targets to be treated as advisory, leading to under-delivery. The new approach introduces consequences for authorities that fail to meet their targets, including the presumption in favour of development being engaged automatically.
The "tilted balance" — which tips planning decisions in favour of granting permission when a local authority cannot demonstrate a five-year housing land supply — has been strengthened. The threshold for demonstrating supply has been tightened, and the consequences of failing to do so are more significant.
For the first time, national policy defines "grey belt" land — previously developed or low-quality land within the green belt — and creates a framework for its release for housing. This is a politically significant change that could unlock thousands of sites, particularly in the South East and around major conurbations.
New deadlines for local plan preparation have been introduced, with the expectation that all authorities will have an up-to-date local plan by 2028. Those without a plan face increased intervention, including the possibility of the Secretary of State directing plan preparation or imposing targets.
The impact of these changes on planning permission data is already beginning to show. According to DLUHC statistics, the number of planning permissions granted for residential development in England in the year to September 2025 was approximately 312,000 units, an 11% increase on the previous year. This is a significant uplift, though it should be noted that the relationship between permissions granted and homes actually built is far from linear. Research by Lichfields and others has consistently shown that the conversion rate from planning permission to completion is around 60–65%, meaning that achieving 300,000 completions per year would require permissions for closer to 450,000–500,000 units annually.
Not every planning permission results in a home being built. Reasons for the gap include: sites that prove unviable at the build stage due to cost or market conditions; permissions that lapse without being implemented (typically after 3 years); sites caught up in legal challenges or condition discharge delays; developers strategically phasing delivery to manage market absorption rates; and permissions for sites with infrastructure constraints that are not resolved in time. Addressing this gap is as important as increasing the total number of permissions granted.
Planning Permission Trends: The Numbers
A closer look at planning permission data reveals both encouraging trends and persistent challenges. The following table breaks down permissions by type and region for the most recent reporting period.
Several observations stand out from this data. First, every region has seen an increase in planning permissions, which is a positive signal for future supply. The strongest increases are in the South East (+15%) and East Midlands (+14%), both regions where the NPPF reforms have had the most immediate impact due to the number of local authorities without up-to-date local plans. Second, the five-year housing land supply picture remains mixed. London stands out with only 3.8 years of supply, triggering the presumption in favour across most London boroughs. The West Midlands and North West are also below the five-year threshold. These are the areas where developers should find it easier to secure permission for new sites, and where new build supply is most likely to increase over the next two to three years.
Green Belt Reform and Grey Belt Release
The introduction of the "grey belt" concept into national planning policy is perhaps the most politically charged element of the reforms. The green belt — which covers approximately 12.4% of England's land area — has been treated as virtually sacrosanct in planning policy since its establishment in the 1950s. Yet the quality and character of green belt land varies enormously, from genuinely valuable countryside and wildlife habitats to disused petrol stations, scrubland, and derelict industrial sites. The revised NPPF now defines grey belt land as land within the green belt that is "previously developed land" or land that "does not strongly contribute to the purposes of the green belt" — specifically, checking urban sprawl, preventing neighbouring towns from merging, safeguarding the countryside, preserving the setting of historic towns, and assisting urban regeneration.
Research by the CPRE (the countryside charity) and the Centre for Cities estimates that there are approximately 11,000 hectares of land within the green belt that could reasonably be classified as grey belt under the new definition. If developed at a moderate density of approximately 25 dwellings per hectare (typical for suburban development), this could yield in the region of 250,000 homes. The government has set a 50% affordable housing requirement for developments on grey belt land — significantly higher than the typical 25–35% requirement on non-green belt sites — which is intended both to maximise the social benefit of any release and to ensure political acceptability.
The early practical impact of grey belt policy has been more limited than the political debate might suggest. As of early 2026, only a handful of local authorities have completed the green belt reviews necessary to identify grey belt sites within their areas, and the process of formal release through local plan revision is inherently slow. However, the policy has shifted the calculus for planning appeals: developers with sites on lower-quality green belt land are now citing the grey belt framework in their arguments, and there is anecdotal evidence from planning inspectors that the policy is beginning to influence appeal decisions. The real impact of grey belt release on housing supply is likely to be felt from 2028 onwards, once more local plans have been updated to reflect the new policy.
Green belt reform remains highly sensitive politically. Local opposition to development on green belt land, even land that meets the grey belt definition, can be intense. Several local authorities have publicly stated that they will resist releasing green belt land through their local plans, setting the stage for potential confrontation with central government. The government has indicated it is willing to use its powers of intervention, including directing plan preparation and calling in applications, but the political costs of doing so are significant. Buyers and developers should expect that grey belt land release will be a slow, contested process in many areas.
The New Infrastructure Levy
The new Infrastructure Levy (IL), introduced through the Levelling Up and Regeneration Act 2023 and now being piloted in a number of local authority areas, represents a fundamental change to the way developer contributions for infrastructure and affordable housing are calculated and collected. Under the existing system, developers negotiate Section 106 agreements with local authorities on a site-by-site basis, and may also be liable for the Community Infrastructure Levy (CIL) where it has been adopted. The S106 system, while flexible, is widely criticised for being slow, opaque, and producing inconsistent outcomes. CIL, introduced in 2010, simplified the process for some types of infrastructure but left the S106 system intact for affordable housing and site-specific mitigation.
The new IL is intended to replace both CIL and much of the S106 system with a single, nationally set levy calculated as a proportion of the gross development value (GDV) of a completed development. The key features include:
The levy is calculated as a percentage of the gross development value of the completed scheme, rather than being negotiated on a case-by-case basis. This provides certainty for developers at the land acquisition stage, as the levy liability can be estimated with reasonable accuracy before a planning application is submitted.
A fixed proportion of the levy is ring-fenced for affordable housing delivery, either on-site or through a commuted payment. This replaces the variable affordable housing requirements negotiated through S106, which were frequently subject to viability challenges and resulted in reduced affordable provision on many sites.
The levy is payable on the sale or occupation of completed units, rather than at the start of development. This significantly improves cash flow for developers, particularly on large phased schemes, and reduces the risk of paying contributions for infrastructure that is never delivered. It also means the levy captures any uplift in value during the construction period.
Local authorities have discretion over how to spend the infrastructure portion of the levy, guided by an infrastructure delivery strategy. This is intended to allow funds to be directed to the most pressing local needs, whether that is schools, healthcare, transport, or green infrastructure.
The pilot programme, which began in 2025 with 10 local authority areas of varying size and character, is designed to test the practical operation of the levy before national rollout, which is expected from 2027. Early feedback from the pilot areas has been mixed. Developers have generally welcomed the certainty that a GDV-based levy provides, noting that it allows them to assess site viability more accurately at the land acquisition stage. However, there are concerns about the transitional arrangements — sites that already have permission under the old S106/CIL regime will not be subject to the IL, creating a potentially complex parallel system during the transition period.
For new build buyers, the Infrastructure Levy is largely invisible — it is a cost borne by the developer and factored into the price of the home. However, the IL could have indirect positive effects for buyers by improving the delivery of infrastructure alongside new homes. One of the persistent criticisms of new build estates has been the failure to deliver promised infrastructure — schools, GP surgeries, transport links — in a timely manner. The IL's structure, with its focus on collecting funds on completion and requiring local authorities to publish infrastructure delivery strategies, is intended to address this criticism. Whether it does so in practice remains to be seen.
Local Plan Progress: The Critical Bottleneck
Local plans are the foundation of the English planning system. They set out where development can happen, what type of development is appropriate, and how much affordable housing and infrastructure is required. A local authority with an up-to-date local plan has a clear framework for making decisions, while one without a plan faces the presumption in favour of sustainable development — essentially, developers can argue that any suitable site should be granted permission in the absence of a plan-led alternative.
The problem is that a large proportion of local authorities in England do not have an up-to-date local plan. According to data from the Planning Inspectorate and DLUHC, as of early 2026:
The government has set a deadline of 2028 for all local authorities to have an up-to-date local plan in place. To support this, the NPPF reforms include a streamlined plan-making process that reduces the typical timeline from 5–7 years to a target of 30 months. The reforms also limit the scope of plans to focus on spatial strategy and site allocations, with more detailed policies covered by national development management policies. This simplification is welcome, but the capacity of local planning authorities to deliver plans to this timetable is a serious concern. A survey by the Royal Town Planning Institute (RTPI) in 2025 found that 62% of local authority planning teams described themselves as under-resourced, and 45% had experienced significant staff turnover in the preceding 12 months. The government has committed to increasing planning fees to help fund capacity, but the skills gap — particularly in specialist areas like viability assessment, urban design, and environmental assessment — cannot be resolved overnight.
For the new build market, the local plan situation creates a two-speed system. In areas with up-to-date plans and allocated sites, the development process is relatively predictable and efficient. In areas without plans, the system defaults to a more speculative, appeal-driven process where developers submit applications for sites they consider suitable and rely on the presumption in favour to secure permission. This ad-hoc approach can deliver homes, but it tends to generate more local opposition, produce less well-planned developments, and create uncertainty for all parties. The government's push to get all authorities plan-led by 2028 is therefore critical to the long-term health of the new build supply pipeline.
Build-Out Rates and Tackling Slow Delivery
One of the most contentious issues in the planning and housebuilding debate is the rate at which developers build out sites that have received planning permission. The perception — fuelled by research and political commentary — is that large housebuilders deliberately slow the rate of construction to manage supply and support prices. The Letwin Review (2018) investigated this issue in detail and concluded that the primary factor limiting build-out rates on large sites was the "absorption rate" — the rate at which the market could absorb new homes without depressing local prices — rather than deliberate land banking.
The revised NPPF and associated legislation introduce several measures aimed at increasing build-out rates:
The diversity of tenure approach is particularly promising. Research by the University of Sheffield found that large sites with multiple outlets (for example, a volume builder selling market homes alongside a housing association building affordable homes, a build-to-rent operator, and self-build plots) could achieve build-out rates of 200–300 homes per year, compared to 50–70 homes per year on a single-outlet site. The challenge is ensuring that the planning system and the market structure support this diversity. Many local plans still default to single-developer allocations, and the build-to-rent and self-build sectors, while growing, are still relatively small in the context of total housing output.
Environmental Regulations and Nutrient Neutrality
Environmental regulations have become an increasingly significant factor in the planning landscape for new build homes. The most high-profile issue in recent years has been nutrient neutrality — the requirement that new developments in the catchments of certain protected habitats (Special Areas of Conservation and Special Protection Areas) must demonstrate that they will not increase nutrient pollution in those habitats. This requirement, stemming from EU-derived environmental law retained in UK legislation, has effectively blocked planning permissions for tens of thousands of homes in affected catchment areas across England, particularly in the Solent, Somerset Levels, Tees Valley, and parts of the Norfolk Broads.
The government has taken steps to address the nutrient neutrality issue. The Levelling Up and Regeneration Act 2023 included provisions to place a duty on water companies to upgrade wastewater treatment works in affected catchments, with the cost met by a combination of water company investment and government grant. A dedicated fund of £280 million has been allocated to deliver nutrient mitigation schemes, and Natural England has been tasked with developing a streamlined assessment process. By early 2026, the mitigation schemes are beginning to bear fruit in some areas, with planning permissions being granted for sites that had been blocked for two or more years. However, progress remains uneven, and in some catchments the backlog of applications waiting for nutrient neutrality clearance remains substantial.
At the peak of the nutrient neutrality crisis in 2023, an estimated 120,000 homes were either blocked from receiving planning permission or delayed due to the requirement. While this number has reduced as mitigation schemes come online, approximately 40,000–50,000 homes remain affected as of early 2026. The resolution of this issue is critical to the overall supply picture, as many of the affected areas — including the Solent corridor and parts of Somerset — are otherwise attractive development locations with strong demand.
Beyond nutrient neutrality, the broader environmental framework continues to evolve. Biodiversity Net Gain (BNG), which requires all new developments to deliver a minimum 10% improvement in biodiversity value compared to the pre-development state of the site, became mandatory in February 2024. The early implementation of BNG has been smoother than many feared, with developers adapting their site designs to incorporate ecological enhancements and a market in biodiversity credits developing to provide off-site mitigation options. However, the cost of BNG compliance — estimated at £5,000–15,000 per dwelling depending on site conditions — adds to development costs and is likely to be passed through to buyers in some form.
Devolved Nations: Scotland, Wales, and Northern Ireland
Planning policy is devolved to Scotland, Wales, and Northern Ireland, and each nation has its own framework and priorities. While the English NPPF reforms have dominated the headlines, there are significant developments in each of the devolved administrations that affect new build supply.
Scotland's National Planning Framework 4 (NPF4), which became part of the statutory development plan in February 2023, continues to shape the planning landscape. NPF4 gives significant weight to climate change, biodiversity, and community benefit, alongside housing delivery. The Scottish Government has a target of delivering 110,000 affordable homes by 2032, and planning policy is designed to support this through Local Development Plans that allocate land for affordable and market housing. Planning permission figures for Scotland showed a 7% increase in residential consents during 2025.
Future Wales: The National Plan 2040, along with Planning Policy Wales (Edition 12), provides the strategic framework. Wales has been proactive in integrating sustainability and well-being objectives into planning, and the requirement for phosphate and nitrogen mitigation in the catchments of affected SAC rivers has been a significant constraint — affecting an estimated 11,000 homes across south and mid-Wales. The Welsh Government has invested in mitigation solutions, and by early 2026, some of the most severely affected authorities (including Powys and Herefordshire) are beginning to see planning activity resume.
Northern Ireland's planning system operates under the Planning Act (Northern Ireland) 2011 and the Strategic Planning Policy Statement. Housing delivery in Northern Ireland has lagged behind the other UK nations, with completions averaging around 8,000–9,000 per year against an estimated need of 10,000–12,000. The re-establishment of the Stormont Executive in early 2024 has enabled some progress on housing policy, and the Department for Infrastructure has signalled its intention to update the Regional Development Strategy to support increased housing delivery.
Impact on Developer Strategy
The planning reform agenda is having a tangible effect on how developers approach land acquisition, site selection, and investment decisions. The increased certainty provided by mandatory housing targets and the GDV-based Infrastructure Levy is making it easier for developers to assess site viability at an early stage. This is particularly important for SME builders, who have less capacity to absorb the financial risk of speculative planning applications.
Major housebuilders have responded to the reforms by increasing their land banks and strategic land positions. Barratt Redrow, Persimmon, Taylor Wimpey, and Bellway all reported increased land acquisition activity during 2025, with a particular focus on sites in regions where planning reform is expected to unlock supply most quickly — the South East, East Midlands, and North West. The strategic land pipeline — sites that are being promoted through the local plan process but do not yet have planning permission — has also grown, reflecting developer confidence that the reforms will result in more sites being allocated in the coming years.
For more information on which regions are seeing the most developer activity, see our analysis of regional new build market hotspots in 2026. To understand the broader market context, including price forecasts and mortgage conditions, see our UK new build market outlook for spring 2026.
Frequently Asked Questions
The National Planning Policy Framework is the government's statement of national planning policy for England. It sets out the principles and policies that local authorities must follow when preparing their local plans and determining planning applications. Changes to the NPPF directly affect where and how many new homes get built, making it one of the most important documents for the housing market.
The reforms are designed to increase the supply of planning permissions, which is a necessary but not sufficient condition for more homes being built. The actual construction of homes depends on a range of additional factors including developer capacity, construction costs, market demand, mortgage availability, and the availability of skilled labour. The planning reforms address the permission bottleneck, but the industry also needs sufficient capacity and favourable market conditions to translate permissions into completions.
The Infrastructure Levy is charged to developers, not directly to buyers. In economic terms, the cost of the levy will be shared between developers (through lower profit margins), landowners (through lower land prices), and to some extent buyers (through higher house prices). The government's modelling suggests that the levy should be broadly cost-neutral at the aggregate level, with the improved certainty and reduced negotiation costs offsetting any increase in the headline levy rate. However, the distributional impact will vary by site and region.
Grey belt land is previously developed or low-quality land within the green belt that does not strongly contribute to the purposes of the green belt. The government's policy allows this land to be released for housing development through local plan reviews or planning applications. Homes built on grey belt land will be subject to a 50% affordable housing requirement, and developments must include high-quality design and green infrastructure. The first grey belt sites are expected to start coming through the planning system during 2026, with homes potentially available to buy from 2028 onwards.
Planning is devolved, so the English NPPF changes do not apply directly in Scotland, Wales, or Northern Ireland. Scotland operates under NPF4, which integrates climate change and community benefit considerations. Wales follows Future Wales 2040 and Planning Policy Wales. Northern Ireland has its own Strategic Planning Policy Statement. All three nations share the challenge of delivering more homes while protecting the environment and responding to community concerns, but the specific policy mechanisms and targets differ.
Conclusion
The planning reform programme underway in England, with parallel developments in the devolved nations, represents a genuine attempt to address the structural barriers to housing delivery that have constrained the new build market for decades. The combination of mandatory housing targets, the strengthened presumption in favour of development, grey belt land release, the new Infrastructure Levy, and measures to accelerate local plan preparation and build-out rates has the potential to significantly increase the supply of new homes over the medium to long term.
However, the reforms are not a silver bullet. The planning system is only one part of a complex ecosystem that determines housing output. Developer capacity, construction labour, building material costs, mortgage availability, and market demand all play crucial roles. The local planning authority capacity crisis is a particular concern — without adequately resourced planning teams, the reforms risk being undermined by delays in plan preparation and application processing.
For prospective new build buyers, the planning reform picture is cautiously encouraging. More sites are being permitted, which should lead to greater choice and, in time, more competitive pricing as supply increases. The infrastructure levy should improve the delivery of community facilities alongside new homes. And the environmental protections embedded in the system — from the Future Homes Standard to Biodiversity Net Gain — mean that new build homes will be built to higher standards than ever before.
To find new build developments in your area and see how the planning pipeline is shaping local supply, explore our new build search tool and keep an eye on our market news blog for the latest updates on planning and housing policy.