Planning reform will not be sufficient to meet government housebuilding targets unless ministers address viability challenges facing developers, according to property consultancy Colliers.
Andrew White, head of UK residential at Colliers, responded to the appointment of Andy Burnham as prime minister and Angela Rayner as housing secretary by warning that while planning reform may gain renewed momentum, the economics of residential development have changed significantly.
“The challenge is no longer simply identifying enough land for development or setting higher housing targets,” White said. “Instead, it is about restoring the economic conditions that allow homes to be built in sufficient numbers.”
Market conditions constraining delivery
White stated that slower sales rates for new-build homes reflected commercial realities rather than reluctance to build. “Housebuilders have always aligned construction with demand, and when sales slow, build-out rates inevitably follow; this is not a reflection of a lack of willingness to build, but of the commercial reality that developers cannot continue to produce homes at a pace that the market is unable to absorb,” he said.
The consultancy identified rising build costs, more expensive development finance, lengthy planning delays and increasing regulatory requirements as factors putting pressure on new housing schemes. This comes as UK house price growth slows, adding further pressure on development viability.
Cumulative policy impact
White highlighted that obligations including affordable housing requirements, Section 106 agreements, the Community Infrastructure Levy, Biodiversity Net Gain and building safety legislation all served legitimate policy objectives but had collectively added significant cost and complexity to residential development.
He emphasised that the solution was not to abandon environmental or quality standards but for ministers to recognise the cumulative impact of policy on development viability. The issue is compounded by ongoing housing affordability concerns affecting market demand.
“Planning reform remains essential and better-resourced local planning authorities would undoubtedly improve confidence across the market,” White said. “But planning reform alone is unlikely to unlock the level of housing delivery that the government is seeking.”
He stated that increasing affordability, providing greater policy certainty, supporting infrastructure investment and maintaining understanding of development viability would all be equally important for achieving sustained increases in housing supply.
“If the new government can restore confidence that development remains commercially viable while creating a planning system that is faster, more consistent and better resourced, there is every reason to believe that delivery will increase,” White said. “If it cannot, ambitious housing targets may once again prove easier to announce than to achieve.”
