In March 2026 ASocialDemocraticFuture (we or our) submitted its response to the Ministry of Housing, Communities and Local Government (MHCLG) December 2025 planning reform consultation (2025 NPPF consultation document) pertaining to the Draft December 2025 NPPF (draft 2025 NPPF) to become the 2026 NPPF, when it is published.
We restricted our response mainly to questions focused on housing delivery, its composition and viability.
This extended post, two months on, and prior to the expected publication of the final 2026 NPPF this summer, expected to include revised viability guidance, develops our consultation response in the light of subsequent policy developments, including the final March 2026 Homes for London package (HLP).
Section one summarises and puts into policy context and summarises our responses to questions that Chapters Two, Three, Four, Six, Thirteen, and Annex B of the consultation document posed, with reference to some defined policy and conceptual issues.
Section two highlights some other key wider related overarching issues posed by the draft 2025 NPFF concerning the planning and housing policy development and delivery interface.
Like our original response, in this introduction we make the prefatory observation that the 200-plus individual consultation questions to be answered meaningfully and in a consistent manner, really required reference to a strategic overarching policy framework, certainly regarding housing aims and objectives, which should have been hardwired into the NPPF but was missing.
The continuing omission of such a strategy threatens to corrode the consistency and coherence of the government’s housing policies and their interactions with its planning reform intentions.
The production of such a housing strategy requires the government to reconcile dilemmas such as the priority to be accorded total dwelling relative to affordable supply and the resourcing of such a strategy within constrained public finances and limiting fiscal rules.
Other identified related core concerns include that a continuing reliance on the private speculative model to deliver most of the needed sustained step change in housing supply delivery is simply doomed to disappointment due to its intrinsic model characteristics predicated on margin not volume supply maximisation.
They have been compounded by key elements of the HLP relating to AHO requirements and viability testing that, if its principles are extended, could risk undermining the future intent and application of the NPPF regarding the development of green and grey belt (GB) land development and the content of future viability guidance, which may be included in an annex of the 2026 NPPF.
To take one key example, footnote 32 of policy HO5 when confirmingthe default 50% affordable ‘golden rule’ for future GB developments also cavils that “unless this would make the development of these sites unviable (when tested in accordance with national planning practice guidance on viability)”.
A lot will depend on future FVA process and how strongly the disavowal of future site-specific FVAs on GB land will be stuck to in relation to schemes, for example, that have already been approved in accordance with the ‘golden rules’.
In that light, and as one concerted developer lobbyist, Nick Cuff, has noted, “the emergency measures announced by MHCLG and the Mayor represented an implicit acknowledgment that the system has failed. Reducing the Fast Track threshold from 35% to 20%, relaxing CIL, loosening affordable housing requirements on stalled schemes are not the actions of a government confident in its viability framework. They are the actions of a government trying to undo, at speed and under political pressure, consequences it did not anticipate”.
CIL relief will now be available where schemes in London demonstrate through a FVA residual appraisal that they are unviable, rather than evidence that the CIL relief is “demonstrably necessary” the developer now only required to make a statutory declaration confirming that the inputs and assumptions used in the residual appraisal are fair and reasonable at the date it is submitted, recognising that inputted values can change over time – in effect, self-certifying its own FVA, which, when submitted, the local planning authority (LPA) must then accept without recourse to further interrogation or requests for additional information.
True, such concessions represent a purported tailored and time-limited response to an emergency London-centric supply crisis but risk becoming a thin end of a cascading wider wedge. Our response XX to the relevant November 2025 consultation shed doubt on whether they would prove successful on its own terms in increasing short term supply.
They also appear inconsistent with a reformed FVA process that reduces the institutional incidence of developer pessimism bias, discussed below.
We consider that the government made a tactical error undermining its longer term strategic housing objectives, as partly and imperfectly captured in the latest 2025 draft NPPF, by implicitly accepting, as Nick Cuff pointed out above, the narrative that AHOs are a developmental burden rather than a source of revenue and demand to developers that can help to de-risk and underpin scheme development, at least within a more certain and consistent planning environment.
In short summary, the economics and the political economy and the overarching policy architecture of housing provision are fundamental to future supply delivery and compositional outcomes.
It follows that planning reform is necessary but insufficient. Applications and approvals do not necessarily translate into starts and completions, which continue to be well below the level consistent with the government’s supply target and which appear to be following a falling trend.
Such outcomes, however, presuppose not only a more transparent, certain and effective Section 106 affordable housing obligations (AHO) system but will also require private business models to shift towards volume and away from margin maximization drivers.
That, in turn, presupposes a systematic derisking of the current speculative private model, in line with the wider shift to a partial public-led contracting interventionist model, as well as greater effective competition within the housebuilding industry (as discussed, in Moving towards a partial public contracting-led partnership model sub-section, below.
These are tall orders, requiring substantive public capacity and coordination and sustainable funding challenges to be overcome over the medium term, well into the next decade.
Meanwhile, the direction of policy travel must be clearly set and communicated by government for the needed reset of housing delivery models and systems to begin; otherwise, confusion and cross purposes will intrude and undermine policy intentions not clearly stated and articulated.
The following concepts were central to, and referenced in, many of our responses, and are explained in outline below.
Developer pessimism bias
Financial viability assessment (FVA), according to government viability guidance, last updated in December 2025 to reflect the content of the 2025 NPFF consultation document (2025 viability guidance), is a process of assessing whether a site (whether it can deliver the housing supply, including affordable, indicated in the relevant planning application as consistent with local and national policy) is financially viable.
It does that by looking at whether the value generated by a development is more than its cost, focusing on the key elements of gross development value, costs, land value, landowner premium, and developer return. These we term FVA input parameters.
Developer pessimism bias refers to the tendency for developers within the FVA process, to overstate such FVA input parameters, including finance costs, while understating sales values relative to what reasonably could be expected to be ultimately realised.
Consequently, Gross Development Costs (GDC) costs are inflated while assumed scheme Gross Development Values (GDVs) are deflated, comparatively to potentially achievable values.
The residual land value metric used in FVAs represents the amount remaining after deducting all development costs – including construction, fees, finance, planning obligations, and developer return – from the gross development value of the completed scheme: GDV-GDC.
A June 2025 National Audit Office (NAO) analysis, Improving local areas through developer funding (NAO, 2025) and Greater London Authority (GLA) evidence (GLA, 2025) identified prevalent developer use of FVAs to reduce AHOs and other planning contributions.
The 2025 NPPF consultation document itself noted incidences where financial viability appraisals (FVAs) have reported very low or even negative scheme residual land values, despite market data showing considerably higher prices were paid for the sites in question, echoing the GLA evidence, linked above.
Such low or negative residual land values indicating that a scheme is not viable, suggests that either the purchasing developer(s), in fact, do expect the scheme to be ultimately profitable (otherwise why did they purchase the land at that price in the first place) or that they simply overpaid for it; perhaps, partly on the expectation that affordable housing obligations would through a later FVA process be subsequently scaled down or even lifted completely.
Viability process segmentation
2025 viability guidance, linked above, advised for FVA land valuation purposes, that a benchmark land value (BLV) should be established with reference to its existing use value (EUV) plus a landowner premium. This is termed the existing use value plus (EUV+) approach.
That premium on EUV should “reflect the minimum return at which it is considered a reasonable landowner would be willing to sell their land”.
Such a premium should provide a “reasonable” incentive (our italics), in comparison with other options available for the landowner to sell land for development “while allowing a sufficient contribution to fully comply with policy requirements” that landowners and developers should consider (rather than take on board?) when transacting land. All very vague and open to interpretation.
The September NPPF 2024 consultation document that preceded the published December 2024 NPPF suggested that, in effect to provide a more tangible and quantifiable benchmark, BLVs for FVA purposes should be set at three times EUV.
One year later, the 2025 NPPF consultation document (see previous link) went on to rule outthe introduction of nationally standardisednationalBLVs.
Instead, it suggested BLVs set at ten times EUV for FVA purposes on greenfield GB land only (with three exceptions, including on previously developed land, applying to even that limited land category).
An influential September 2024 Lichfields blog argued that the necessary land value uplift was between ten and 40 times EUV, if not more.
Other leading property consultancies, such as Knight Frank, have concluded likewise, with their analysis providing some likely underpinning for recent movements in MHCLG policy thinking across this area.
The key point they make is the progression of land to residential development requires expenditure to be initially incurred at risk to secure planning permission – allowing the EUV to be converted into a BLV (land promotion) – and then later to be incurred to fund up-front infrastructure/servicing of plots for housebuilding.
However, this treatment assumes that the landowner takes on the responsibility both of land promotion and infrastructural funding, when they often in practice they are, and should in principle be considered, separate processes within the development journey – something termed here as viability process segmentation.
Lumping together these processes means that the different considerations and potential risk profile attached to each are conflated and not made subject to the dedicated separate scrutiny that they each deserve and require.
Land value transfer values should and need to be separated from the costs of securing planning permission and then incurred providing site servicing infrastructure – processes that do not need to be undertaken by landowners, whom generally are not usually best placed to undertake them.
Instead, they should be separately costed within FVA process in accord with viability process segmentation principles.
It follows that any landowner premium assessed for FVA purposes should omit planning and development risks that landowners do not need to take on, which should instead be separately accounted for in developer risk-adjusted returns.
FVA (whether undertaken at plan- or decision-making stage) transparency, effectiveness, and enforcement requires such viability process segmentation.
Moving towards a partial public contracting-led partnership model
If housing supply is to reach and sustain an annual net additional 300,000 dwellings by the end of this parliament and into the next, the provision of affordable housing must be mainstreamed across public and private systems on a much more integrated and on scale basis, incorporating a greatly streamlined, more certain, and effective AHO delivery system, within a wider partial public contracting-led partnership model, outlined in Appendix One.
Private sector partners could then compete to build the homes and infrastructure on a volume and quality basis, rather than generating the bulk of their returns through high risk and high margin land promotion and development, thereby addressing some of interlocking market failures associated with the current speculative model.
As this article explains, the divergence in the business models of Berkeley and Vistry encapsulates in many respects the horns of the dilemma facing government: how can it accelerate and increase private sector housing delivery in current market conditions without reducing AHOs and thus affordable supply.
In short summary, Berkeley, actively welcomes reduced affordable housing obligations (AHOs) obligations as they enhance overall aggregate and average profit return: AHOs offer a lower return relative to what the company can achieve by ‘optimising’ the pace and value of its open market sales and underlying landholdings, by actively managing the absorption rate, dribbling out supply , if necessary, to secure and sustain set required returns.
In contrast, Vistry’s business model, to a degree, is dependent on AHOs providing a core cash flow source for its homebuilding activity, lobbying government to maintain or even increase AHO obligations to support its business model, choosing to prioritise partner funded pre-sells, including from the government, councils and registered providers (RPs), not its own risk open market sales.
To Berkeley, AHOs are zero sum; to Vistry, positive sum. Current market conditions, according to some market commentators, are inducing other developers also to de-risk and reducing private sale as a percentage of their future delivery pipelines in line with an institutional shift towards a partial public contracting-led partnership model.
Lowered levels of market and economic risk associated with more certain and known outcomes, including purchase by councils and housing associations (RPs) for onward officially defined affordable housing use is in the scheme mix, could make risk adjusted returns of c6-9% acceptable to developers compared to the 20%-plus associated with the speculative model.
However, that implies guaranteed purchase sources for such affordable dwellings, which, amongst other things, presupposes a much more streamlined and certain S106 process – an imperative that future posts will examine in more detail.
Most master planned schemes will also require substantial additional public resourcing to support necessary supporting transport and physical up-front infrastructural provision.
1. Question responses focused on housing delivery, its composition and relationship to viability.
This section puts into policy context and summarises our responses to questions that Chapters Two, Three, Four, Six, Thirteen, and Annex B of the consultation document posed.
Chapters Two and Three, Plan-making and Decision-making policies; Annex B: Viability: Standardarised inputs (SIs) in viability assessment; and questions relevant to blank Annex X, populating SIs and updating viability guidance
Policy PM12 seeks to promote greater clarity at the plan-making stage to avoid the need for subsequent negotiation at the decision-making stage concerning expected developer contributions.
To maximise certainty and to reduce the need for viability assessment at the decision-making stage, our response agreed that developer contributions should be set at a level that allows planned types of development and sites to be deliverable.
However, variations in regional, area, and site typologies (site heterogeneity), along with changes in prevailing wider macro-economic and development circumstances, will make that a challenging process, even when the current elongated gestation periods that currently mark local plan (LP) making are reduced with the new streamlined arrangements (see following comments on Policy DM5).
Also crucially, the core tension between the policy advantages of certainty and consistency versus the practical need for flexibility necessitated by site heterogeneity could manifest itself, if a ‘lowest common denominator’ approach was adopted,
in the setting of area-wide developer contribution requirements less than the affordable delivery capacity of the LP plan when considered as a whole.
Policy DM5 is the decision-making counterpart to PM12, intended to work in tandem with it.
According to the 2025 NPFF consultation document, it seeks to reduce cases of unnecessary site-specific viability assessment.
The policy isreproduced in full below:
1. Where development proposals accord with relevant up-to-date plan policies and national decision-making policies, they should be assumed to be viable. Relevant policies in this context are those which relate to the contributions expected from development.
2. There may be limited circumstances in which it would not be possible for development to proceed on a policy compliant basis, and a viability assessment to inform decision-making is justified to ensure that a proposed development makes the maximum possible contribution to affordable housing and other infrastructure. Such circumstances may include situations where:
a. The development is significantly different from any typology assumed in the development plan viability assessment;
b. Site characteristics differ substantially from the assumptions used to assess viability when the relevant development plan policies were prepared;
c. The development is demonstrably burdened by costs which were unforeseeable when the development plan was prepared; and/or;
d. Site or economic circumstances have changed significantly since the development plan was prepared.
3. Neither the price paid for land, nor the price intended to be paid through an option agreement, should be a justification for failing to accord with relevant policies in the plan.
4. Where a viability assessment is submitted with a development proposal, this
should be based upon and refer back to the viability assessment(s) that informed the relevant development plan policies. It should fully evidence all inputs and assumptions used in the assessment, and explain any differences from those used for viability assessment that informed the relevant plan policies.
All viability assessments should reflect the recommended approach in planning practice guidance, utilising the standardised inputs set out in [Annex X – to be added subject to the outcome of this consultation], and should be made publicly available.
5. These considerations should inform the decision maker’s assessment of the weight to be given to a submitted viability assessment.
6. Where a viability assessment is submitted and contributions are reduced below the requirements set out in relevant development plan policies, decision makers should consider using review mechanisms to seek policy compliance over the lifetime of the project, in accordance with planning practice guidance.
In response, we noted that DM5 (1) and (2) above presuppose that robust and comprehensive plan-stage viability-set requirements are then relied upon by developers when they could well revert to submitting site specific appraisals using the exceptions cited (a) to (d), perhaps more as a rule than as an exception.
Alternatively, as per our PM12 response, plan-set affordable housing obligations (AHOs) given site and scheme heterogeneity could be set at a low lowest common denominator level.
Fundamentally, it will also take many years for compliant and standardised plan-level FVAs to become universally embedded within the planning system. The use of FVAs and their process assumptions (including those that may be set out in Annex X) at decision-making and later stages are likely to remain common well into the next decade.
Regarding DM5 (3) to (6), in principle, AHO and planning requirements should be incorporated into the initial land price or cost. In practice, however, this often does not occur because of tendency for FVA pessimism bias, where developer FVAs tend to overstate land acquisition costs and/ or other costs, including financing costs, reducing FVA residual values.
The mechanism by which AHO requirements are fully reflected in land acquisition costs is not clear and will be subject to what is included in Annex X of the 2026 NPPF.
Future changes in macro-economic and housing market conditions can subsequently allow schemes to be completed at higher returns, providing justification for proposed growth testing (see below) and continuing later stage FVA reviews.
Regarding Policy DM6, we highlighted that its intentions require a more streamlined, certain and effective AHO system – a general housing policy imperative impinging on housing delivery aspects covered by the consultation.
The 2025 NPPF consultation document to provide greater consistency and upfront certainty to reduce the need for negotiation at DM stage, went on to propose the:
- introduction of growth testing;
- a move to lower specific developer return FVA parameter expectation than the current 15% to 20% range;
- and sought views as to how future viability guidance should treat alternative use values and the cross checking of residual land values when setting benchmark land values (BLVs).
In response, we again highlighted the tendency for developer FVA pessimism bias concerning the cost of land and other key developer inputs inflating scheme costs, while deflating expected sales values lower than might reasonably be expected, reducing residual values.
Turning to overall developer returns, our longstanding view is that profit returns of 17.5% and above relative to GDVs set as a standard expectation on speculative market sales are a symptom of a badly functioning market, subject to multiple interlocking market failures (see our consultation response to the November 2025 to the emergency London package). .
The strategic aim must be to reduce such expected rates of return – lowering it from 20% to 10%, as an average, would, all other things remaining the same, reduce the sale price of a currently priced £270,000 house by over £25,000: a significant improvement in affordability that should provide consequent improved access into affordable sustainable home ownership.
The subsequent increased demand that should follow this income effect should then increase developer supply volumes, their revenue, and their total profit.
Increasing the proportion of pre-sold, including affordable housing units, on schemes, say, above 500 dwellings, in our assessment, would prove more important than the specification of a single specific developer return figure for FVA purposes.
This, to reiterate, however, requires a more certain, streamlined and effective AHO system.
Although some practitioners consider that an internal rate of return (IRR), for instance, is a more appropriate metric for Build-to-Rent (BtR) than is return relative GDV, others point out it is more complex and uncertain.
Our view is that more important for the future expansion and viability of BtR schemes, apart from their cost of capital, is for their development costs to be reduced by the omission of extras such as concierges, resident gyms and lounges, that generate high service charges unaffordable for most moderate- and medium-income residents.
The BtR sector should be nudged to migrate down the value chain to cater better to that sustainable segment of the market, less sensitive to the vagaries of foreign investor demand.
The 2025 NPFF consultation document went on to propose cross-checking FVA residual land values with the residual land values reported for comparable schemes.
In response, after endorsing of the consultation document’s proposed treatment of alternative use value (AUV) on BLV determination, we noted that the prevalence of developer pessimism bias provides the justification for late stage reviews to pick up on actuals in cases where assessed unviability (based on assumed inputs) led to the dilution of planning requirements (it also provides a possible justification for growth testing).
Our preferred approach is for land value expectations to be embedded as closer as possible to existing use value (EUV) at the outset in accordance with the process segmentation principle (see Introductory viability process segmentation sub-section, and Section Two point x).
That is likely, as a rule, more likely to generate more land value capture (LVC) on green/grey than on brownfield sites, especially in London, where competition for land for different uses is more intense, increasing EUV and AUV values.
Chapter Six: Delivering a sufficient supply of homes: HO4: HO5: Meeting the needs of different groups; HO8: Providing Affordable Homes; On-Site Affordable Housing Provision; HO13: Build out of residential and mixed-use development.
Policy HO4 sets out requirements to identify locations and sites for large scale residential and mixed-use development to support opportunities to meet housing and other development needs through the provision of large, strategic sites, such as new settlements and urban extensions.
It goes on to note that such settlements can support a comprehensive approach to development, by including a diverse range of housing types, adopting high quality design and ensuring appropriate infrastructure provision.
To strengthen policy support for mixed tenure development (our italics), and to ensure that new settlements plan for a diverse range of housing types and are built out as quickly as possible (our italics), the policy proposes that local plans set out expectations for a mix of tenures to be provided on these sites (our italics).
We noted that the progression of a ‘partnerships’ model for large sites, consistent with the a progressive shift to a partial public-led contracting system, involve selling a greater proportion dwellings to institutional investors for build to rent and Registered Providers for affordable homes, should help to both increase supply and to ensure speedier build out, as would expanding the strategic master planning role, of Homes England, of the new Development Corporations and of the Mayoral Strategic Authorities.
These public authorities should coordinate land assembly, planning and delivery on major new housing-led developments, using compulsory purchase powers (CPO) when necessary.
Such strategically master-planned large developments should also parcel up land for different models of delivery (build to rent, low-cost rent and intermediate tenure housing), small and medium housebuilders (SMEs), self and custom build.
This should help to de-risk development and to ensure that the right economic and social infrastructure (transport, health, education) is delivered.
We endorsed the general sentiments and policy drift draft HO4 conveys. Large strategic sites certainly need to be built with greater tenure type, and size diversity, delivering higher shares of affordable housing and of Build to Rent homes.
Greater tenure and property type diversity supported by front-loaded mandated affordable housing provision could possibly allow private developers to cater for different local sub-markets providing steady levels of demand at prevailing local second-hand prices.
Build out statements setting out mixed tenure requirements linked to timetable requirements could constitute a condition/material factor in the application decision making process, while the above requirements could be mandated by a new national development policy (NDMP).
However, after noting that the MHCLG intends to review and update HO4 following the government’s confirmation of the locations for new towns to ensure their incorporation into the preparation of relevant spatial development strategies and local plans, we concluded that the policy, as currently drafted, fails to tackle or address many of the key issues that will determine its success or not.
The MHCLG planning reform working paper: speeding up Build out (March 2025 MHCLG build out consultation) cited evidencethat providing a higher proportion of affordable housing amid the parceling of land for different property types leads to faster build rates.
Echoing our July 2025 response to that consultation paper, we cautionedthat it was unclear how faster build out involving the mandating of greater and type diversity in large scale schemes was going to be practically achieved as a general mainstreamed principle in contrast to a few demonstration master planned sites.
Schemes involving the setting mixed tenure requirements are still likely to be bedeviled by viability-associated problems.
While future iterations of national development management policies (NDMPs) could mandate tenure diversity and minimum affordable housing provision as a general principle and thus address possible reluctance to specify them at the local level, that wouldn’t by itself overcome viability issues emerging, some of which are rooted in shortcomings in the design and operation of the viability process, as was discussed in the introduction.
These to be overcome require a range of strategic interlocking interventions that, in effect, involve a systematic process shift to a partial public contracting-led model, as well as NPPF-related reforms to the FVA process including viability process segmentation that could effectively reduce the incidence and impacts of developer pessimism bias.
Chapter Thirteen. Protecting the Green Belt: Policy GB8: The Golden Rules.
The 2025 NPPF consultation document, afterruling out the introduction of a nationally standardisednationalbenchmark land values (BLVs), proposed instead testing viability at plan making stage (plan FVAs) using ten times existing value BLV inputs on greenfield GB land only.
Three exceptions to the continuing ban on the use of site-specific viability appraisals on future GB developments (site specific FVAs) were also proposed covering:
- Previously developed land (PDL’s);
- Multi-phased strategic sites; and,
- Development of a “wholly different” kind to any of the types applied at plan stage.
We advised that developers seeking a PDL exemption should be required to isolate and quantify additional scheme costs, if any, relative to comparable virgin green field development, taking also into account the availability and suitability or otherwise of site infrastructure already in place accordant with the viability process segmentation principle.
The policy also proposed a fixed national floor whereby 10% or 15% of GB developments, subject to the three exceptions defined above, should be Social rent (SR) – that is unless up-to-date development plans specify otherwise.
We cautioned that such a minimum floor could be treated as a cap rather than a floor.
More generally, we noted that the 2024 NPPF consultation document had had suggested a standardised national BLV uplift of three times (300%) existing use value (EUV).
The GLA when setting the BLV for FTT viability purposes in its 2017 Affordable Housing and Viability Supplementary Planning Guidance (SPG 2017), applied a nought to 30 per cent premium multiplier on existing use value plus (0-30%).
The evidential justification moving to ten but only for GB greenfield land was not spelt out in the 2025 NPFF consultation document.
Presumably, MHLGC concluded that three times (300%) was too low to incentivize landowners to sell.
We recognised that nationally standardised BLVs must reconcile the advantage of national policy certainty and consistency with the reality of regional, sub-regional, and local differences, making a ‘one size fits all’ approach potentially problematic.
Three or ten times existing agricultural use value, for instance, in quantum, will vary considerably between higher and lower value housing market areas.
Another potential problem is that a standardised BLV requirement is treated as a minimum floor rather than a maximum ceiling by landowners; or, conversely, developers make it a standard viability input regardless of what they actually paid to landowners in individual cases.
On the other hand, and crucially, effective and transparent FVA process requires a benchmark anchor (BLV) using the viability segmentation process to assess the reasonableness of otherwise variable and indeterminate land value assumptions, which should not be limited to GB land.
That is unless alternative mechanisms/measures that could help to align land transfer values assessed principle closer to levels consistent with end housing affordability are effectively deployed.
2 Other key issues (developed since consultation response submission).
This section seeks to identify other primary cross-cutting issues likely to impact upon the effectiveness of the new 2026 NPPF.
These were touched on our February 2025 review of the December NPPF,Labour’s Planning Reforms: Ends and Means and/or have also been raised by expert planning practitioners, such as in this planoraks blog.
Point One
The 2025 NPPF consultation document headlines the government’s commitment to the paramountcy of a LP-led system. However, it presupposes that most LPAs have up-to-date plans examined under the new 2026 NPPF when published – an end state that will emerge sometime beyond this parliament, well into the next decade.
In February 2025 only 86 LPAs, out of 308, possessed an up-to-date local plan (less than five years old) as at (NAO 2025, as per previous link) – less than a third of LPAs in England.
Local plan making currently takes years involving an elongated, some might call tortuous, process, encompassing separate sequential consultation and examination stages that can take years, rather than weeks.
Often by the time a LP is finally adopted, circumstances, such as the overarching policy environment, have changed, requiring them to be modified, even to the point of replacement, making their end value measured by housing supply delivery and planning decision effectiveness metric relative to resources expended, questionable to say the least.
Another Zack Simons blog on the back of evidence that suggests that while the planning system is LP-led and LPAs remain the decision-makers for 90% of homes permitted in England, pointing out that the main impetus for LPAs to expedite their LP process is usually to avoid becoming subject to the latest NPPF, changes to national policy are likely to have only marginal impact.
The system requires a much more streamlined and compressed gestation, consultation and examination periods, aligned to regular five-year refreshment/review, going beyond the current 30 month expectation for the new ‘slimline’ LPs to be completed – a timeline that is still too long, yet seems optimistic given past and current practice.
Given the direction of national policy to centralise planning decision making and the importance accorded to SDSs, Simons argues that new LP plans should not involve detailed development management policy but rather should narrow down to a detailed map populated by an easily searchable list of allocations and designations, reviewable at most every five years, even less.
Point Two
The 2025 draft NPFF replaces the ‘tilted balance’ by a more positive proactive embedded broader presumption in favour of development, as covered in decision-making policies S2-5, (see Lichfield’s presumption decision tree).
Essentially in line with a ‘brownfield-first’ approach, they reflect a shift to a rules-rather than discretionary-based system – at least within settlements.
A development application within the settlement boundary should be approved unless its identified benefits are substantially outweighed by its identified adverse effects, when assessed against the national decision-making policies contained within the 2026 NPPF: officially, a default yes.
Outside settlements, Policy S5 also requires development applications to be subject to that same positive presumption principle, but with a key difference: it will apply only in defined ‘carved in’ circumstances, (S5,1a-j).
Beyond these ‘carved-in’ categories, approval should only be granted if exceptional circumstances are deemed to apply, where benefits substantially outweigh adverse effects, taking account of the character of the countryside: a constrained, by exception, rather than default, yes.
The two major ‘carved-in circumstances’ when the positive presumption will apply outside settlements, is when:
- the relevant LPA cannot demonstrate a five year housing land supply (5YHLS) and a Housing Delivery Test (HDT) result ofless than 75% of its housing requirement over the previous three years and the proposed development is “well related to an existing settlement (unless the nature of the development would make this inappropriate) and be of a scale which can be accommodated taking into account the existing or proposed availability of infrastructure” (S5,1ji); ts corollary, as explained in point three below, is that where the relevant LPA can demonstrate a 5YHLS and positive HDT result, the constrained, by exception, presumption will apply;
- much more significantly, as it will apply regardless of the above, is when the proposed development is within a reasonable walking distance from a well-connected rail station(s) – defined as located within the top 60 Travel to Work Areas ranked by Gross Value Added by Gross Value Added (GVA); and which, in the normal weekday timetable, are served (or have a reasonable prospect of being served due to planned upgrades or through agreement with the rail operator) throughout the daytime by four trains or trams per hour overall, or two trains or trams per hour in any one direction (S5,1h).
Even if located on GB land, housing and mixed use developments that are of reasonable scale (GB7h), which can be accommodated taking into account the existing or proposed availability of infrastructure; are within reasonable walking distance of a railway station capable of providing a high level of connectivity to services and employment; are physically well-related to a railway station or a settlement within which the station is located, is of a scale; and conforms the GB8 ‘golden rules’ including 50% affordable housing, should be accorded ‘substantial weight’.
This change could have transformational supply-enhancing impacts if it encourages dense but sustainable housing and mixed use development around railway, tram or urban transit stops.
Policy L3 specifies a density of at least 40 dwellings per hectare, or 50 dwellings per hectare where the station or stop is defined as ‘well-connected’.
Such developments, however, are unlikely to be delivered within the timescales required by the government’s 1.5 delivery target.
Other categories include where land is allocated for development (where this lies outside settlements) and where it has been previously developed.
The separate treatment of land in and outside of areas defined as ‘settlements’ (policy S2a) combined with the importance accorded by policies S4 and S5 to the demarcation of settlement boundaries, however, could lead to a new series of contested applications and appeals.
They could also restrict development on greenfield sites not specifically covered by the S5 stated ‘carved-in’ exceptions.
Also, in practice, and more generally, different rules and policies will continue to conflict, such as between the broader embedded presumption and national and local housing policies, pertaining, for instance, to affordable housing, or to design.
Their adjudication is likely to depend on the assessment and weighting accorded to such policies focused on whether assessed adverse non-compliant effects are deemed to ‘substantially outweigh the presumption’ – a judgment whichwill continue to be subject to local discretionary decision (as per point one).
In the short-term, at least, and almost certainly for much, if not the entire lifetime of this parliament, the government will have to heavily rely on speculative non-Local Plan (LP) compliant applications translating into starts and completions quickly enough to provide much of what can be delivered towards its supply delivery target by the end of this parliament, linking to point one and two.
Point Three
The proposed draft transitional arrangements outlined in Annex A confirm that 2026 NPFF decision-making policies will become material considerations on the date of its publication.
Any existing LP policies inconsistent with them will then be accorded with very limited weight for decision making purposes (other than ones that have been examined and adopted against the 2026 NPPF, which also when published will form the basis of all new LP plans – see point one).
Applicant appeals/speculative applications based on the broader embedded presumption are likely to follow discussed in point two. However, for the purposes of plan-making, older LPs examined and adopted under previous NPPFs (the overwhelming majority) will continue to proceed in accordance with their parent NPPF version and the relevant then prevailing housing target provisions.
Annex A also proposes that where a LPA can demonstrate a 5YHLS (with the appropriate buffer) and a Housing Delivery Test (HDT) result of more than 75% of its housing requirement over the previous three years, housing target shortfalls (calculated using the December 2024 standard method as set out in Annex D) will not be considered as evidence of unmet need, for a period of five years from the date of the plan’s adoption (our italics), for the purposes of policy S5(1)(j).
According to a Lichfields ‘Tipping the Scales’ blog, that risks constraining delivery across at least 39 LPA areas by an estimated 77,000 homes over five years below their December 2024 standard method accessed LHN figure.
On the other hand, LPAs unable to demonstrate both a 5YHLS and better than 75% HDT delivery will become subject to speculative applications based on the broader 2026 embedded presumption, as per pojnt two.
In another March 2026 London plan turns five blog, in that light, Lichfields reported that most London LPs, including those currently being prepared, will be based on out-of-date housing targets, risking the ‘baking-in’ of local housing strategies and site allocations at target housing delivery levels lower than that consistent with new London Plan targets, likely to become operative in early 2028.
The London Borough of Ealing (LBE), whose proposed new LP has been under examination against the 2023 NPPF since November 2024 now May 2026), has a current annualised housing target of 2,157 dwellings set by the 2021 London Plan, itself now out-of-date (London borough development plans comprise basically both the London Plan – acting as a SDS – and relevant and operative parts of its LP.
Ealing has accumulated a shortfall against its current London Plan apportioned target, as have most London LPAs.
In 2028 it will almost be certain to be apportioned (over a ten-year period) by the new London Plan, a target closer to its December 2024 target, which is equivalent annualised target of 3,407 dwellings (see this LBE document for further source background). .
Ealing’s new LP, however, is based on a 5YHLS set over a 15 year trajectory, predicated on its existing (slightly increased to reflect past shortfall), lower by more than a third, target.
More generally, the complicated and indeterminate interplay of 5YHLS trajectories, HDTs, the assessment of weightings accorded to different policies relative to the presumption subject to local discretion and then appeal, within a system where most LPs are out of date, seems to underscore the made in point one and point four below that the LP process more often than not appears to offer limited practical utility or upside relative to the resources expended.
Point Four
Central to future planning practice and outcomes, will be the rolling out of spatial development strategies (SDSs), as set out in policy PM1.
SDSs should lay out a positive vision for future growth and change at a sub-regional scale over a forward period of 20 years, set and apportion local housing requirements (reviewed after five years) , identify broad locations for new settlements and major urban extensions, GB boundaries, as well as the required underpinning strategic transport and other supporting infrastructure, using digital mapping and other communication aids.
The development plan (DP) for each LPA will, once the relevant SDS is adopted, will be its LP and the overarching SDS.
Policy HO2 states that SDS housing requirements should be set for each subject LPA plus the assessed additional needs of neighbouring LPAs and future growth needs linked to economic development or infrastructure investment.
That is unless NPPF policies concerning the protection of GB land, local green spaces, national landscapes, national parks, or other designated heritage assets or habitats apply; or the where the LPA includes areas at risk of flooding or coastal change provide strong reasons for restricting the overall scale, type or distribution of development in the plan area; or where any adverse impacts of doing so would substantially outweigh the benefits, when assessed against the policies of the NPPF taken as a whole (policy S1).
The future impact of SDS on housing delivery outcomes will be muted across the short-term to medium term: besides timescales, the example of the London December 2024 880,000 dwelling target over ten years, equivalent to 88,000 annually (broadly consistent with the government’s delivery target (roughly three times pre 2025 supply crash levels of housing supply) underscores that in the absence of concerted, coordinated and interlocking strategic reform and actions at both local and national levels (as per introduction) that SDS local requirements imperfectly and belatedly (see Ealing example outlined above in point three) apportioned to subject LPAs, risk becoming purely aspirational.
Point Five
A clear contradiction is discernible. The rolling out of strategic planning and SDS’s, hopefully combined with effective devolution of funding and policy powers, provides a vision for the future, whose effectiveness or otherwise, will, however, depends upon the timeliness and effectiveness of the shift needed towards a partial public-led contracting system.
And, well into the medium term, delivery will continue and quite likely increasingly depend on speculative applications, as per points 1-4.
Point Six
LP allocation of sites for housing development can simply result in massive land value uplift, rather than timely build out in accordance with local needs (the purported purpose of the December 2024 standard methos (SM), reproduced in Annex D.
Certainly, a successful and timely transition to a partial-led public contracting model will require landowner price expectations to be compressed to levels more consistent with government public policy on housing, supply, access, and affordability policy ends.
The CPO powers included in the 2023 Levelling Up and Regeneration Act (LURA) to purchase at existing value (add) provide an ultimate public policy ‘stick’ as a last resort.
However, if that stick is to be credible in moulding landowner expectations and behaviour, the available powers must be applied and demonstrated as operable, which, hitherto, they have not.
Point Seven
Regarding NMDPs, statutory status suggests mandatory requirements that should be applied nationally, or at least to defined categories of LPAs, overriding local discretion.
A case exists for them to be made statutory as per section 93 of LURA to support the aim and desired end state of streamlined and timely LP production and review (see point one)
Certainly, they should be focused on policy areas that most pertinently and urgently require such treatment for wider public policy ends – a wider objective than simply avoiding duplication with LP provisions.
Many, if not most policy areas, fall into a grey area where a desirable policy end can conflict with local discretionary preferences, such as small site policy, recently subject to a recent Centre for Cities report, consistent with policy three – Driving urban and suburban densification – of the 12 key policy changes the consultation document highlighted.
It provides, perhaps, an exemplar example of where the government needs to weigh the advantage of setting “clear and definitive” national policy that would positively impact on housing supply outcomes against the possible disadvantages connected to abrogating local discretion (see point one).
Point Eight
A competitive housebuilding market requires robust SME participation marked by lower barriers to entry and disproportionate process requirements.
However, we are sceptical that the proposed ‘medium site’ category and related facility for AHOs to be delivered through cash commutation rather than in kind is the right answer.
First, commuting AHO requirements transparently on a certain and consistent basis to cash payments presupposes that these are calibrated, quantified, defined and understood.
Second, the danger is that LPAs simply accumulate such payments, involving an opportunity cost of AHO units provided in kind.
Third, whether the medium site size definition of 10-49 units is appropriate is open to question.
Fourth, it is unclear and unevidenced that commuted AHOs offers the most effective path to supporting SME delivery.
Reducing the overall complexity and burden of the planning process on SME’s is more important, reducing information and other process requirements.
The S106 process pertaining to the purchase of AHO units by RPs and councils must be streamlined and made more efficient and certain – a general theme throughout our consultation response.
Appendix one: Moving to a partial public contracting-led and partnership planning model (to be updated).
The contradictions currently inherent within both the existing public and private delivery systems require a progressive shift to a partial public contracting-led and partnership planning model.
Public authorities supported by increased levels of enabling public investment with access to new financial intermediaries/instruments, levering-in varied sources of private finance in conjunction with an adequately capitalised National Housing Bank (NHB), would set masterplan requirements, would secure the necessary planning and other approvals, would assemble the land, and would forward-fund enabling pan-site infrastructure, where necessary or most cost-effective/efficient.
They would harness private sector skills and initiative to provide enabling infrastructure and to build larger scale developments, according to set best design, quality, and efficiency standards.
Masterplan briefs would split sites into different segments/lots allowing a range of housebuilders to compete to build different types of properties offered at different price points, including those targeted at local potential purchasers at lower quartile levels.
Working up such a model to practical realisation would be a detailed and complex process, involving many different stakeholders, but should be accelerated, streamlined, and supported by a robust, concerted, and focused central direction at both a political and administrative level.
New Town and other Development Corporations will need to pioneer and kickstart early demonstration examples this parliament. The schedule below accordingly outlines indicatively what such a shift to a partial public contracting-led and partnership planning model should comprise and progress.
Short term
New Towns Taskforce identifies provision model attached with supporting delivery and resourcing plans consistent with partial public contracting-led partnership model (which could also act as a template for future strategic GB projects subject to the golden rules);
Mayoral, Combined Authorities and Development Corporations to likewise develop strategic plans/projects consistent with the progress of the government’s delivery target and its wider growth and other objectives, whether in Oxford/Cambridge arc, London, or pioneer New Towns scattered across the country;
Revised viability guidance (currently awaited) should set out a consistent implementable framework for BLV setting for viability purposes based on EUV-plus at a premium that can underpin voluntary exchanges at Benchmark Land Value (BLV) values consistent with the provision of necessary public infrastructure and affordable housing at desired levels, embedding them into future land and house price expectations, thus reducing the net public expenditure costs associated with a shift to partially-led public contracting model;
Continuing reform of compulsory purchase order (CPO) rules consistent with the use of CPO as a backup default stick to encourage such voluntary exchanges at a defined premium close to existing use values on and beyond GB land, including greenfield, urban extensions, and the next generation of New Towns;
A properly capitalised NHB established and provided with clear remit to lever in private finance at the levels required to support partnership model and supporting infrastructure funding at needed levels; Section 106 Affordable Housing Obligations process streamlined, made more certain and effective for councils, for RPs, and for developers;
Developers of stalled sites should be encouraged and facilitated to divest to Build to Rent (BtR) investors/providers, completed or soon to be completed dwellings at a price consistent with their affordability for local moderate to middle income households; and to councils/RPs for onward affordable letting (where properties are suitable in type and cost), noting that in London nearly 50% of market sales lately have been to BtR providers.
Medium term
- New Town and other Development corporations develop expertise cluster in land assembly to acquire land at values close enough to EUV to make them viable inclusive of infrastructural and affordable housing requirements, using CPO as a credible but last resort default;
- Innovative forms of institutional infrastructural funding provided at mainstreamed scale to supplement and blend effectively public sources of infrastructural and development funding;
- Development corporations to master plan and manage large scale developments offering a range of property types and tenure at different affordability levels on a Letwin-plus model to bring on stream a transformational step change delivery within ten years;
- Partnership planning between public and private sectors to mainstream at scale the provision of mixed tenure affordable housing on a steady state annual basis;
- Construction industry partnership planning covering workforce planning, skills and training development, and working conditions, should be established and embedded within the above wider partnership planning arrangements;
- The National Housing Bank and other funding intermediaries access and funnels pension fund and other sources of private finance at sufficient scale, supplementing public forward funding of infrastructure, with housing investment recognised as a key driver of inclusive sustainable growth.
Lasting changes and forward vision
Affordable housing is mainstreamed within a public-private partnership planning model focused on maximising supply, quality, and affordability.