If it is to deliver economic growth, the planning and development sector needs more support than was offered in today’s Budget
The Chancellor began speaking about planning the moment she rose to her feet, suggesting that perhaps the housebuilding sector was going to receive some much-needed fiscal, and other, support. But it turned out that planning and development was being cited as an example of the government’s success, rather than its future intent – something that many in the sector would disagree with.
The Chancellor began speaking about planning the moment she rose to her feet, suggesting that perhaps the housebuilding sector was going to receive some much-needed fiscal, and other, support. But it turned out that planning and development was being cited as an example of the government’s success, rather than its future intent – something that many in the sector would disagree with.
The Budget arrived at a moment when development activity is at its weakest in over a decade. The market has been drifting, with buyers and sellers have been waiting see what the Chancellor announces, and planning applications and permission are at their lowest levels since 2012.
There were fewer than expected significant changes announced in today’s Budget from a property and planning point of view. They can be summarised as:
- A new national property tax through a new High Value Council Tax Surcharge
- National Insurance on rental income
- Some support for first time buyers through Lifetime ISA Reform
- Changes to agricultural property relief and business property relief from 6 April 2026
New towns barely got a mention. The brief reference was a vague commitment, that ‘the government will continue to consider the ways in which private finance can support the delivery of wider infrastructure ambitions including leveraging private finance to help deliver the next generation of new towns’ - not the funding commitment that was hoped, or further detail about how the funding and management would be structured.
What the development industry needs is simple:
- A commitment to investing in our local planning authorities. On this basis, the pre-announced commitment of £48m to hire around 350 additional planners and set up a planning careers hub is welcome: we need a planning system that’s fully staffed and properly funded to deliver the 1.5 million homes. For too long, concerns about local government reorganisation have meant that jobs are lost through attrition. Local authorities have had to employ freelance planning consultants on temporary contracts which is both detrimental to schemes’ progress and costly. While this measure will be good in the long term, it’s not the short term solution necessary.
- No new development focused taxes or costly regulations. Raising tax on property risks worsening an already fragile market.
- Clarity on development viability. If new taxes or regulations are introduced, they must be offset by realistic expectations on CIL and s106 contributions from development.
- Stability over speculation. For the past three months the development industry has been dealing with constant speculation and uncertainty about what the Chancellor might do in the Autumn Budget around taxes. Delaying the Budget has impacted sales, land deals and planning activity, which has depressed activity. While the Budget did little to restore confidence and encourage investment in our towns and cities, it has, we hope reduced some of the damaging speculation.
Right now, delays, higher costs and mixed messages are just as big a block to delivering new homes than planning policy or local authority resourcing. If the Government wants more homes to be built, it has to give the industry stability and confidence. Stability in tax policy, combined with increased investment in employing more planners, is the foundation for growth. Without it, the 1.5m homes target moves further out of reach.
Affordable housing needs practical support, not unrealistic expectations
Affordable housing delivering is struggling. Across the country, development sites are stalling, and many housing associations are having to step back from buying S106 affordable homes because their costs have risen so much. The Making Social Rent Homes Viable report says that nearly £19bn a year is needed to build the number of social rent homes people actually need, which far exceeds current programmes.
The Budget did little more than re-announce the £39bn commitment for the 10‑year Social and Affordable Homes Programme (SAHP) which had already been announced several times previously. The government has also said that it will respond to the social rent convergence consultation in full in January 2026, before the launch of the SAHP.
With the fiscal gap widening, we did not expect large new funding commitments from Government. We may continue to see money being shifted around within the affordable housing programme, but realistically there wasn’t going to be a big pot of new funding.
However, what the affordable housing system needs is simple:
- A short term mechanism to unlock stalled Section 106 homes. Many developments are paused because housing associations cannot afford to take on the affordable homes. Allowing funding for Homes England to step in temporarily might keep some of these schemes moving.
- Flexibility in planning obligations. Councils should be required to revisit tenure mix when affordable providers cannot take on certain homes. The current rigid approach risks letting sites stall.
- Provide support for alternative affordable tenures in weaker markets. In areas where sales are slow, intermediate products (such as London Living Rent-style models) could help build up momentum.
Conclusion
In the context of today’s announcement, the pledge to deliver 1.5 million homes this Parliament sadly feels more unrealistic than ever. That said, we have a revised NPPF to look forward to this side of Christmas as well as the Planning and Infrastructure Act coming into force imminently. So more potential change is to follow soon. Watch this space.