Where will 1.5 million New Homes be Built?

We take a look at a recent white paper that delves into the question of where land for the government’s promised 1.5m new homes will be found…

The Labour Government has made it clear that it intends to build 1.5 million new homes over its term in parliament. Yes, the UK has a shortage of homes, especially affordable homes, but one of the main hurdles is the availability of land.

Terraquest, which operates the Planning Portal, produced a white paper – Plotting the Future – in advance of the new National Planning Policy Framework (NPPF December 2024) and looks at this specific issue in relation to the housing shortage.

The report refers to the emergence of Grey Belt land – Green Belt land where development is possible, subject to certain criteria being satisfied; these criteria are different to those traditional exceptions set out within the NPPF (ie, Paragraph 154) where development is not deemed to be inappropriate.

The white paper notes that the following challenges to finding land for housing include:

• Existing use: Land is in use and unavailable for new development
• Land market factors: Land is not in use on the market because landowners expect to be able to command a higher price in the future
• Property market factors: Demand for homes is not sufficient to support profitable development in places where land is available
• Infrastructure factors: Supporting infrastructure needed for housing development does not exist in the area
• Technical factors: Land is unsuitable for development due to issues such as excessive steepness, flood risk, poor ground conditions, inaccessibility and contamination
• Planning factors: Land is in the Green Belt, a national park or another designated area, making it difficult to obtain planning permission

Grey Belt Land

However, the white paper also says that Grey Belt land could well be significant by freeing up land for housing development. Traditionally, planning policy has restricted development on Green Belt land around cities and towns in a bid to stop urban sprawl and coalescence. However, it’s these areas where the jobs are, and thus demand for homes is often at its highest. This then causes house prices to rise, meaning they become unaffordable for many. Nevertheless, it is also more likely to have existing infrastructure, which makes it functionally more possible to develop.

The advent of Grey Belt in the new NPPF has already seen a raft of appeal decisions that are being keenly followed by all those in the planning and development sectors, both public and private. The concern is that whilst many appeals are being allowed, where historically they would have been dismissed, many continue to be dismissed. It is also evident that where Grey Belt was perhaps intended to give more assurance to developers and allow for a more positive outlook by decision-makers (local planning authorities and the Planning Inspectorate) such decisions continue to be at the mercy of subjective opinion, therefore, clarity is still lacking. Those discussing Grey Belt in the planning press, including eminent KCs, suggest that the necessary clarity might not come for some time, at least until after several dismissed appeals are challenged in the Court.

Annex 2: Glossary of the NPPF defines ‘Grey Belt’ as follows: “land in the Green Belt comprising previously developed land and/or any other land that, in either case, does not strongly contribute to any of purposes (a), (b), or (d) in paragraph 143. ‘Grey Belt’ excludes land where the application of the policies relating to the areas or assets in footnote 7 (other than Green Belt) would provide a strong reason for refusing or restricting development.” Accordingly, this is why decisions on planning applications remain subjective.

Other relaxations on development in the Green Belt introduced by the NPPF are where the ‘Golden Rules’ apply. They only relate to proposals for major development for housing and where affordable housing requirements are satisfied, there will be necessary improvements to local or national infrastructure, and the provision of new, or improvements to existing, green spaces that are accessible to the public. These requirements do not mean that development in the Green Belt is easy, however. In fact, whilst the NPPF has made some development in the Green Belt easier it is not guaranteed to be the panacea to achieving 1.5 million new homes.

Brownfield Passports

The government hopes that Brownfield Passports will go some way to help tackle the constraints on land supply. Its policy paper on the matter invites views on further action that could be taken through the planning system to support the development of brownfield land in urban areas. It proposes options for a form of ‘brownfield passport’, which would be more specific about the development that should be regarded as acceptable, with the default answer to suitable proposals being a straightforward “yes”. Other initiatives, such as the Government’s New Homes Accelerator, and the New Towns Taskforce may also help to address the issues.

However, Geoff Keal, CEO of TerraQuest, points out that according to its inaugural Market Index Report, since 2015, over a million homes with planning permission have yet to be built, which highlights that even with available land, there are barriers to development.

Geoff notes that: “For developers, a big concern is the potential effectiveness of government reforms in expanding land availability, which is an issue we directly address in Plotting the Future. In all likelihood, the most significant challenge hindering our ability to achieve desired national development levels is likely to persist and that is the identification of suitable sites for profitable housing projects.”

The white paper adds: “It is vital that government and industry work together to streamline planning and ensure land is delivered where it is most needed to meet ambitious targets.”

We will watch developments with interest.

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