The government is sharpening its focus on speeding up housing delivery with a new consultation paper that proposes a range of reforms — from increased transparency to the potential introduction of a “delayed homes penalty” for developers.
Published alongside a technical consultation on build-out accountability, the Planning Reform Working Paper seeks views from across the industry on how best to incentivise faster delivery of new homes. It pays particular attention to large sites, where slow absorption rates have long throttled supply.
Among the most notable proposals is a penalty for developers who fall materially behind agreed build-out schedules. Framed as a last-resort measure, the penalty would aim to give local authorities meaningful leverage to hold developers to account.
The consultation also suggests mandating mixed-tenure developments above a certain threshold — potentially as low as 500 homes — and expanding support for faster delivery models, including SME builders, build-to-rent and high-affordable housing schemes.
These proposals are rooted in findings from the Competition and Markets Authority and the Letwin Review, both of which concluded that most sites are built out at the pace homes can be sold, not at the pace they can physically be constructed.
Additional powers under the Levelling-up and Regeneration Act 2023 would also give local councils the ability to reject planning applications from developers with poor build-out records — reinforcing a “use it or lose it” principle within the planning system.
Reacting to the paper, Steve Harrington, planning director at Regal, urged a measured response to the government’s proposals.
He said: “There is much to digest in the government’s latest consultation paper — and the temptation to leap to conclusions based on headline interpretations should be resisted. The detail matters.
“We, and most other developers, are committed to delivering homes at pace once planning permission is secured. Delays are in no one’s interest and, in most cases, only arise under exceptional circumstances.”
“The hope is that any new provisions are drafted with a clear-eyed appreciation of the operational realities developers face. Clear, practical drafting will be critical to ensuring new rules are workable in practice and properly understood across the sector.”
Harrington also warned that poorly executed reforms could have the opposite of their intended effect. “Crucially, additional regulatory uncertainty risks compounding an already challenging funding environment. Policy must strike a balance between ambition and deliverability — or risk deterring investment at a time when it is most needed.
“At present, a significant brake on progress is the Building Safety Regulator’s Gateway regime. While its intent is sound, the cumulative delays it introduces must be addressed if the system is to function as intended.”
Others in the sector echoed these sentiments, highlighting the practical constraints facing developers and planning authorities alike.
Jermaine Browne, co-founder of Re:shape Living and ARK Coliving, welcomed elements of the reform but argued that deeper systemic issues remain unresolved.
He said: “The Planning Reform Working Paper is a step in the right direction – recognising the role of SMEs, affordable housing and build-to-rent and, by extension co-living – in speeding up housing delivery. But MHCLG still misses the mark. If Labour truly wants to meet its housing targets, it must fix the basics: unblock the Building Gateway issues, resource LPAs, and revise schemes of delegation nationally to empower officers and streamline the planning process.
“The longer we delay enacting meaningful change, the more we destroy — and the more future generations will suffer.”
“Overly simplistic”
This emphasis on systemic change was reinforced by Patrick Hickey, director of development consultancy Make NW, who acknowledged the government’s ambition but cautioned against an overly simplistic approach.
“The government’s ambition to get Britain building again is welcome, and initiatives to unlock brownfield land and support local authorities are much needed,” he said. “The push to compel developers to build more quickly — including through increased transparency, naming and shaming slow builders, and revoking permissions for landbanking — reflects mounting political pressure to boost housing numbers.
“However, this oversimplifies the challenge. Delays are rarely due to developer reluctance alone. More often, they’re caused by complex site conditions, protracted negotiations over section 106 obligations, under-resourced planning departments and delays from statutory consultees. The threat of punitive measures won’t solve these structural issues — and may even deter much-needed investment on marginal or high-risk sites.”
Hickey also stressed the critical role of SMEs in accelerating housing delivery: “The government is correct in identifying that absorption occurs on larger housing sites… SMEs delivering new homes on smaller sites build out more quickly as their margins are lower and they need their return on capital more quickly. We are heartened to hear the government say it is listening to SMEs. SME housebuilders have a key role to play in solving the housing supply crisis in England.
“It is no coincidence that, back in 1988, when SMEs built almost 40% of all new homes in the country, England managed to deliver 202,000 new dwellings – more new homes than have been built at any point for two generations.
“These proposed reforms can only be effective if they are matched by meaningful support: properly funded local planning teams, faster responses from national agencies, more support for SME housebuilders and more upfront infrastructure funding to de-risk delivery. Otherwise, we’re in danger of shifting blame without fixing the system. We need reform, but we also need realism.”
Image © Robin Utrecht/Shutterstock
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