"This is not just a call to the Ministry of Housing, Communities and Local Government. It is important for the Chancellor to recognise the importance of positive messaging. Recent announcements on property taxation have had the effect of talking down the market at precisely the moment when confidence is needed."
- Francis Truss - Carter Jonas
A call to action for the government
The government has consistently stated that the property sector is central to its ‘national mission’ to drive economic growth. Recent planning reforms, such as identifying ‘Grey Belt’ land for release and reintroducing mandatory housing targets, are welcome.
But these only tackle the very first hurdle in the development process. They are necessary – but far from sufficient – if the property sector is to power growth.
If the housing crisis is to be resolved, and if development is to deliver the growth the Chancellor expects, much more must be done. Ahead of the Labour Party Conference, our message to the government is to build on early reforms by addressing the deeper barriers that hold back delivery.
The supply side challenge
London offers a stark illustration of the difficulties developers face. Earlier this month, the HBF’s publication Mind the Gap described how just 30,000 new homes were completed in London in the year to June 2025, representing a 12% drop from the previous year, well below pre-pandemic levels. Furthermore, just 966 new residential schemes were approved in the 12 months to June 2025 - the lowest number since records began in 2006.
Affordable housing requirements, mitigation for nutrient neutrality and phosphates, the Building Safety Levy, recent and proposed changes to building regulations, and biodiversity net gain (BNG) - when layered on top of one another in a market with limited value growth – can cumulatively tip schemes from viable to unviable.
The GLA has recognised this and is beginning to reduce planning gain requirements in order to support delivery. National government may need to respond in a similar way.
At the other end of the spectrum, larger schemes are routinely stalled by the lack of infrastructure funding. This has long been the missing piece of the housing puzzle. As the government pursues its new towns agenda, each expected to accommodate at least 10,000 homes, mobilising and incentivising private finance in a more concerted way is essential, otherwise the ambition of 12 new towns will remain just that.
The demand side problem
Even when supply can come forward, developers will only build as quickly as homes can be sold. At present, sales rates are slow. Unless demand is stimulated, housing targets will remain out of reach.
A measure to increase demand is already in the pipeline with the growth in affordable housing grant funding (announced in the Spring Statement). However, there remain limitations on the demand for open market housing, given limited (compared to other points in the last decade) incentives being available to the critical first-time buyer market and the exodus of buy-to-let investors in recent years.
The evolution of biodiversity net gain
BNG is an example of a new regulation which is slowing down the application process. While the principle is widely accepted by the development sector, as Carter Jonas’ research shows, there are pinch points in the system that need to be addressed if the policy is to work in practice.
Currently, a review is being led by DEFRA. Yet it is planners and surveyors who deal daily with the consequences of implementation and its impact on land values and the wider Section 106 packages. BNG must evolve through a streamlined process, with ecologists working with planners and surveyors to speed up the process and assess the impacts at an earlier stage to provide greater clarity.
A message for the Chancellor
This is not just a call to the Ministry of Housing, Communities and Local Government. It is important for the Chancellor to recognise the importance of positive messaging. Recent announcements on property taxation have had the effect of talking down the market at precisely the moment when confidence is needed.
The government is right to see the property sector as a powerful engine for economic growth, but positive sentiment in the wider economy is key to realising this.
The property market requires political understanding and pragmatic reform. With those conditions in place, the sector can deliver the homes, communities and growth that the government seeks.
