Labour planning reforms kick-start UK housebuilding growth

This figure has been met with some scepticism, though, because to achieve their target, Labour would have to build homes at a rate not seen in the UK for generations.

However, UK housebuilding firms are optimistic following the latest Labour planning reforms.

Labour planning reforms

One of the first things Labour promised in their manifesto was to update the National Policy Planning Framework, including restoring mandatory housing targets. They would also fund local authorities around the UK by increasing the number of planning officers in a bid to move stalled projects along.

Labour has opened up part of the greenbelt for building and promoting infrastructure projects.

The deputy prime minister and housing secretary, Angela Rayner, has also stepped in to approve several high-profile projects that had previously been blocked by local authorities.

The head of residential research at Savills, Lucian Cook, has recently praised Rayner’s planning agenda, jovially claiming she had proved herself as the “goddess of reform”.

“One of the most radical changes [Labour has] made is putting in place a housing minister with a genuine interest in building more homes,” he added.

UK housebuilding optimism

Sir Keir Starmer’s administration has been under intense pressure to deliver economic growth after taking over government from the Conservatives in 2024. They’ve faced plenty of criticism for their tax raises and a rise in the UK’s borrowing.

However, UK housebuilding companies, like Taylor Wimpey, are optimistic about the housing industry.

Jennie Daley, chief executive of Taylor Wimpey, is “delighted” with the progress Labour has made thus far.

She said: “I am not deaf to some of the criticism that is being made. But in the planning realm, they have acted swiftly. I have not seen a government act this quickly . . . in many, many years.”

Another major housebuilder, Persimmon, said the new Labour planning reforms would “likely take some time to fully make a difference” but has already helped the developer increase its number of active housing developments from 270 to 300.

Rising costs for UK housebuilding firms

While there is optimism that UK housebuilding companies can get more spades in the ground, they are now facing a tougher financial future.

Many housebuilding companies are facing rising costs from Labour’s most recent Budget, which included increasing employers’ national insurance contributions. Taylor Wimpey has since warned that an “increased build cost pressure” is likely.

Property developers will also be vulnerable to rising mortgage prices, which could negatively impact demand.

Additionally, the affordable housing sector has called on the UK government to provide more funding. The Home Builders Federation has warned Labour that they are a long way from being able to deliver their 1.5 million target for new homes, and more funding is required to reach their target, especially for affordable housing.

The largest listed builder of affordable homes in the UK, Vistry, has said that the government must provide “meaningful investment in the funding programme for affordable housing to accelerate the supply of housing, provide certainty to the supply chain and support economic growth”.

Meanwhile, the Resolution Foundation has said it will cost £15 billion to clear the backlog of families currently in temporary accommodation.

The UK government is expected to provide more information for their multi-year spending plans for affordable housing in the upcoming spending review in Spring 2025.

UK housebuilding news and trends at ABC+ Warranty

While the Labour planning reforms are doing some good in the building industry, there are still some issues – mainly financial – facing a lot of UK housebuilders.

At ABC+ Warranty, we’re always keeping up to date with the latest industry news and trends. You can, too, by checking out our other news articles and blogs.

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