UK Autumn Budget 2024: what are the planning announcements affecting housebuilding?

In her first Budget, the chancellor, Rachel Reeves, set out plans aimed at “restoring stability to our public finances and rebuilding our public services” and restoring “economic stability”.

She announced substantial tax rises of £40bn and reframed her fiscal rules to facilitate £100bn of public, capital investment over the next five years. Critically, in addition to the tax measures that affect businesses generally, she made substantial funding commitments to assist with housing delivery and announced the timeline for reform of the key planning policy and legislation relevant to house building.

Timeline for policy, legislation and strategy

Unusually for a Budget, two of the most important announcements for the housebuilding sector did not directly relate to finance. The government confirmed that its response to its consultation on the National Planning Policy Framework (NPPF) and the wider planning system (the NPPF consultation) will be published by the end of this year (for commentary on the consultation see our earlier Insight). The main vehicle for legislative changes to the planning system, the Planning and Infrastructure Bill, will then follow in early 2025.

The government also highlighted its 10-year infrastructure strategy, which is scheduled for publication in late spring 2025 alongside the Phase 2 Spending Review. This strategy is due to outline the government approach to core economic infrastructure including housing and transport.

Housing funding

The government announced that £5bn is set to be invested in housing in 2025-26.

An additional £500m will be added to the current Affordable Homes Programme to spend before it ends in 2026, but the follow-on plans are not yet known and will be addressed in the Phase 2 Spending Review.

The government will provide £1bn in 2025-26 to accelerate the remediation of unsafe housing, particularly the removal of unsafe cladding.

It is consulting on a new long-term social housing rent settlement of CPI+1% guaranteed for five years to encourage the private sector to deliver social housing. To support councils' social housing supply levels, it is reducing Right to Buy discounts and allowing English councils to retain full sale receipts.

Increasing LPA capacity and capability

The government will provide £46mn of additional funding to recruit 300 junior planning officers, accelerate large sites that are stuck in the system and to increase local authority capacity.

Alongside other funding increases, the wider grant package for local authorities is also set to be increased by £1.3bn. While much of that grant funding is for non-planning related expenditure, additional funding is likely to reduce general pressures on council budgets, including for planning departments.

Combined with the fee increases proposed in the NPPF consultation, these measures will help local planning authorities (LPAs) to increase their capacity and capability to engage with applications from housebuilders.

Further funding to address nutrient neutrality

As trailed, £47mn is allocated to support developers in delivering up to 28,000 homes that are currently held up by nutrient neutrality issues. This falls far short of unlocking the total 160,000 homes which the Home Builders Federation estimate are currently stalled, but further measures based on using development to fund nature recovery are expected in the Planning and Infrastructure Bill.

The government has said that a further £70m of the Department for Environment Food and Rural Affairs' budget will be provided in 2025-26 “to support infrastructure and housing development while boosting nature’s recovery” but this does not appear to relate to nutrient neutrality.

Lower cost loans for SMEs and Build to Rent

The government is making available £3bn to provide guarantees to assist SME and Build to Rent developers in accessing lower-cost loans.

Transport funding

The chancellor has committed to £650mn of funding for local transport to increase connectivity and a further £200mn for City Region Sustainable Transport Settlements.

There is also a near 50% increase in road maintenance funding, as well as specific promises to fund the HS2 rail project running into Euston, rail upgrades between York and Manchester, and a rail connection between Oxford, Milton Keynes and Cambridge. As expressly recognised by the government, transport investment can unlock areas for housing development.

Osborne Clarke comment

How will this year's Budget impact your business?

All of our UK Budget insights - in one place

Explore

More fundamentally from a planning perspective, the industry needs to know the shape of the final policy in the NPPF, the content of the Planning and Infrastructure Bill, and the strategic and funding decisions due to be made in the 10-year infrastructure strategy and Phase 2 Spending Review. At this stage, housing clearly remains a government priority, but the industry will be waiting for these next steps to understand this government's approach to the sector.