Labour promised to “build, build, build” – is 2025 when they start to deliver?

The new Labour Government came to office with the pledge to “get Britain building”. For Keir Starmer and his team this is essential to deliver on its key missions – to achieve the highest growth in the G7, deliver zero-carbon electricity by 2030 and to build 1.5 million new homes in five years. 

Will 2025 see construction sites kick into action? Helping to tick up economic growth, kick-start the creation of new communities to tackle the housing crisis, and prompting a revolution in new renewable energy? 

So far, the signs are strong. In the first few months of office Angela Rayner has announced some bold action. 

This has included planning reform like the new National Planning Policy Framework, adopted this week after a consultation. This will reintroduce mandatory targets for housing delivery at more ambitious levels. It also demands universal coverage of Local Development Plans (LDPs), loosens restrictions on building on England’s green belt – including a new ‘grey belt’ land designation – and gives greater weight to development proposals in key growth sectors like renewable energy, digital infrastructure and life sciences. 

The Government has also intervened in controversial planning applications, where the delivery of critical infrastructure appears in the balance. Rayner has used her powers to approve solar farm developments, a green belt data centre that was refused by the local council, and a housing development previously refused by her predecessor Michael Gove. Really significantly, Rayner called-in an application for a new garden town in Kent hours before it was likely to be refused by councillors. 

5654 understands that the Planning and Infrastructure Bill, due to be published early next year, will be ambitious, one of the biggest pieces of legislation in this Parliament. Rayner has signalled this will include further planning reform like streamlining planning decision-making so proposals that comply with LDPs can be decided by professional planners rather than planning committees. 

The development sector is encouraged by the Government’s actions and rhetoric. But decades of tweaks to the planning system, rather than proper reform, has bred cynicism among developers and planning professionals.  

There is a definite sense that things are different this time- the Chairman of a housebuilding firm told 5654 this week “we finally have a supportive government”. But judgement is being reserved. What impact will 300 new trainee planning officers the Government has promised have (industry view is that it is a drop in the ocean compared to what has been lost in the last decade)? How robustly will the Government act to enforce new rules once they are implemented. And in the longer term, how ‘Yimby’ will Labour MPs continue to be, particularly those in newly won constituencies in rural and suburban areas with wafer thin majorities, when they feel the heat of constituents opposed to planning proposals in their area? 

Beyond the politics, the extent to which housebuilders make the decision to build will depend on economic headwinds, like interest rates holding stubbornly high. So, while they may decide to restock their pipeline by buying land and going in for planning, actual building may come later when there is more evidence of increasing demand, more stability on construction costs and greater clarity on post-Grenfell fire safety regulations. The housebuilding Chair we spoke to told us planning reform is welcome, but planning is just one aspect that is making it difficult for the industry to deliver. 

What does the Labour Government need to do to allay the doubts and give builders the confidence to build? It needs to be interventionist. Angela Rayner must continue to take control of planning decisions where local councils threaten to stifle growth and the delivery of new homes. And she should intervene robustly (where recent previous governments have not) with councils that drag their feet on adopting LDPs, by forcing them to act or removing control of the process from them. 

Finally, some housebuilders have talked about supply side reform not being enough to kick-start building. Particularly to meet the target for 1.5 million new homes, which Housing Minister Matthew Pennycook recently said will be more difficult to achieve than the Government expected. They want action to boost demand with first time buyers – through a new ‘Help to Buy’ type scheme. Though with the public finances stretched this seems unlikely. 

In 2024, the new Labour Government has delivered some strong signals. But this is unlikely to be enough to make 2025 the year that construction takes off. If the Government continues to show that it means business, this will start to lift doubts, help to give the development sector some of the confidence it needs, and pave the way for building to spike from 2026 onwards. 

Cameron is a Partner at 5654 who heads our Built Environment practice. 5654 provides planning communications, public affairs and corporate communications support for businesses across sectors in the built environment including housebuilding, commercial development, digital infrastructure and energy generation.