00Executive summary

The politics of housing have changed. The Prime Minister, the Deputy Prime Minister, and the Chancellor have all declared that planning reform is central to the Government’s national economic strategy. Higher growth, more investment, and greater disposable incomes all depend on more housebuilding, and their pitch is that planning reform is central to achieving their target of 1.5 million homes over the Parliament.

Despite this, the policies the Government has proposed so far have been very much in the vein of “small-r” planning reforms to the existing system, designed to reverse changes made by the last government. There is seemingly much less appetite to change the system itself.

Using newly available data on English housebuilding by local authority since 1946, digitised by Centre for Cities, this report shows how big changes to the planning system over the last 70 years affected different parts of the country.

The introduction of the discretionary planning system in 1947 (the basis for today’s system) appears to have negatively affected brownfield development – which is inherently more difficult even without planning restrictions – in cities and London in particular. But it appears to have had less of an impact on greenfield house building in Shire counties, which had high building rates in the 1950s and early 1960s.

The subsequent introduction of the further restrictions of the green belt in 1955 and the Town and Country Act 1990 (and centralisation of local government finances) changed this, with private housebuilding in the Shires declining from the 1960s and again in 1990s. These changes have reduced and disconnected supply from demand in every part of England.

These findings have two implications for the current Government’s housebuilding ambitions:

  • First, even if the Government was to repeal incremental changes not just since 2019 but since the 1960s, private housebuilding would still fall short of the 1.5 million new homes target by 388,000 homes (26 per cent). Annually, this would mean reaching just 281,000 homes of the target of 372,000. Public housebuilding alone will not be able to make up this difference.
  • Second, this approach would only make it relatively easier to build on greenfield sites. While Shire areas risk falling short of the target by 7 per cent (68,000 homes), the big cities outside the capital risk undershooting by 35 per cent (96,000 homes), and London by 60 per cent (196,000 homes). This would mean increases in housebuilding would mostly be achieved through low density, car-dependent developments. These changes would do little to deal with the planning barriers to building within existing urban footprints.

This means that the Government has a stark choice if it is to meet the 1.5 million target that it will be judged on at the next election. It either abolishes the green belt to allow greenfield sites to build at much higher rates and go beyond their 1950s-60s high period. Or it changes the system itself, removing the discretionary, case-by-case approach to approving decisions and replacing it with a zoning system. This would see planning set clear rules up front and remove the huge uncertainty in the current system that undermines attempts to build more homes on urban as well as greenfield sites.

To allow the private sector to better respond to demand and maximise the benefits of planning reform for the economy and cities, the Government should:

  • Replace the discretionary system established by the Town and Country Planning Act 1947 with a new flexible zoning system, similar to that in every other G7 country, along with development on small parts of the green belt around railway and tube stations.
  • Pursue an ‘Economy First’ English devolution agenda that, by simplifying local government, would make it possible to merge local plans with local transport plans, and so plan for new housing and infrastructure in the same process, as well as reform local finance.
  • Overhaul the London Plan to focus on spatial and strategic questions of urban growth, not detailed restrictions on development.
  • Review the “anti-supply measures” of the previous Government, including Biodiversity Net Gain’s barriers to brownfield development, the delays with Building Safety Gateway 2, height limits for single-stair buildings that are set too low, nutrient neutrality, and minimum space standards that block flats small enough for single households to afford.

The Government should do this alongside a series of interventions in public housebuilding, looked at in more detail in the second paper in this research series.