Spring Statement – Material Impact of Planning Reform

A glimmer of optimism emerged from an otherwise cautious Spring Statement presented to Parliament on 26th March 2025, as the Chancellor of the Exchequer outlined revised economic forecasts and fiscal priorities for the year ahead.

With the UK’s economic growth projection for 2025 halved to just 1%, the outlook across most sectors remains subdued. However, a bright spot came in the form of new modelling from the Office for Budget Responsibility (OBR), which highlighted the potential for a meaningful increase in housebuilding across the country - driven by recent reforms to the planning system.

The OBR now expects housing supply to gradually rise over the next four years, reaching over 305,000 new homes per year by 2029. This would represent a significant uplift from the 244,000 homes delivered in 2024, and even exceed the post-financial-crisis peak of 287,000 homes built in 2019, just before the onset of the Covid-19 pandemic.

This projected growth is underpinned by planning reforms introduced by the government last year. While the OBR was clear that these changes will take time to filter through to actual delivery - highlighting that housebuilding levels are still expected to fall further in the short term - the long-term trajectory appears more positive.

The reforms aim to streamline the planning process, reduce bureaucracy, and encourage local authorities to allocate more land for development, particularly in areas with high housing demand. These changes are beginning to restore confidence among developers and investors who have faced years of uncertainty, slow approvals, and inconsistent local policies.

Importantly, the OBR noted that the planning reform will serve as a “welcome offset” to some of the sector’s major headwinds, including elevated build costs and the ongoing impact of high interest rates. Material costs remain above pre-pandemic levels, and tighter financing conditions have slowed construction starts over the past 18 months. In this context, any policy that improves efficiency and reduces friction in the planning pipeline is likely to have a measurable and positive effect on output.

For those considering a move, the implications of these reforms are worth noting. An increase in new-build supply could, over time, relieve some pressure on house prices—particularly in areas where housing demand consistently outpaces availability. However, given the long lead times for planning approvals, infrastructure delivery, and construction itself, the benefits of these changes will not be felt overnight.

At Langford Rae Property Agents, we continue to monitor how national policy changes impact our local markets in Chelsfield, Orpington, Sevenoaks and the surrounding villages. While planning reform won’t solve the housing supply issue in the short term, the direction of travel is encouraging. For homeowners, buyers, and investors alike, understanding how these changes shape long-term trends is key to making informed property decisions.

If you would like to discuss how these planning reforms may affect the value of your home or investment property, our team is always on hand to offer expert advice.

Source: Dataloft by PriceHubble, Spring Statement, OBR Historic data is for England, Wales and Scotland