Levelling up or a barrier to house building?

The Queen’s Speech yesterday included the “Levelling Up and Regeneration” Bill to deal with regional disparities in the UK, including reform of the planning system.

This bill has already proved divisive, with previous proposals causing backbench rebellions, where a zonal planning system (splitting the country into areas marked for growth, renewal or protection, with growth areas granting automatic approval to housebuilders for developments) was resisted on the basis of being “electorally toxic”. As were plans for wider-reaching reforms to the judicial review process, in which individuals and organisations could challenge official decisions in court. The new bill, by way of compromise, will give communities more say on developments and “…give residents the right to dictate the style of developments affecting their area”.

But will the new bill actually help boost house building to the next level? The previous iteration of the bill promised to increase house building, and level up the country through development in the Midlands and the north of England, but was pushed back on the basis that communities would be side lined from planning decisions. 

So will this actually change anything if NIMBY leaning residents retain powers to block development? Once in force, will house builders actually face fewer barriers to building more houses?

Or is the current planning system actually the main barrier to house building?

A snapshot poll conducted by LABC Warranty in 2021 noted that the availability of building products and materials was the biggest challenge facing the sector, followed by access to skilled workers and traders. Only 29% of responders noted the planning system as being the main challenge facing the sector. 

Year-on-year prices for all building work rose by 21.0% from February 2021 to February 2022, according to the BEIS Monthly Statistics of Building Materials and Components report for March. In April's S&P Global/CIPS construction Purchasing Managers' Index, a third of construction firms polled also reported that delivery times for key materials are getting longer.

Shortages have been attributed to energy price rises, inflation uncertainty (making it harder for trades to quote for projects on fixed price contracts and subsequently passing on any price increases to materials onto customers or otherwise erode their profit margins) and supply chain disruption caused by Russia’s invasion of Ukraine.

It is clear that housebuilders face many challenges, but whether this new bill will level up housebuilding remains to be seen.