UK Government doubles down on efforts to get Britain building
24th September, 2025
Around one in eight jobs in the United Kingdom is in the built environment sector and therefore ensuring that the industry thrives is of national importance.
In the run up to the Parliamentary election in 2024, Sir Kier Starmer recognised this, announcing that “getting Britain building again is critical for economic growth” and pledging to build 1.5m new homes by the end of this Parliament. Unfortunately housebuilding in the first year of the Labour administration is reported to have been at the lowest level in nearly in decade, in part due to challenging economic conditions.
In this article, Ward Hadaway’s new Public Funding Partner, Alexander Rose argues that despite these figures, there is cause for optimism with the government in the process of announcing a series of changes and initiatives which can be expected to help spur increased levels of development in the next year.
Background
The Labour government was elected in July 2024 on the basis of a bold manifesto entitled “Change“. This contained ambitious commitments to invest in the built environment, including the creation of 1.5m new homes by the end of this Parliament (which is expected to be August 2029).
Despite this ambition, the BBC has reported that fewer than 29,000 development projects were granted planning permission by councils in the year ending June 2025. There are also grounds to believe that the number of houses built has fallen by around 8% compared to the previous 12 months.
Whilst the Labour government has not seen the pace of delivery that its politicians wanted, there now appears to be some cause for optimism, in particular:
1. The appointment of Steve Reed
On 5th September 2025, Steve Reed OBE MP became the new Secretary of State for Housing, Communities and Local Government. In his opening address he was clear that MHCLG’s number one priority will be unlocking development – stating that the focus of the Ministry will be on going “further and faster to get Britain building. It’s time to build, baby, build” and that “everything is on the table” in order to meet the goal.
Working alongside Housing Minister, Matthew Pennycook MP, and Construction Minister, Chris McDonald MP, the new Secretary of State is reported to be planning “a blitz of new measures” in the coming weeks to unlock development.
Clearly Steve Reed will ultimately be judged upon results, but it’s a positive step forward for the sector to see that MHCLG is led by a Secretary of State who is openly focussed upon unlocking increased development.
2. The announcement of a wave of New Towns and other public funded initiatives
Labour pledged to build a “generation of new towns” in its manifesto. To put this into practice it invited applications from across the country for new large-scale communities of at least 10,000 homes each and created the New Towns Taskforce, led by Sir Michael Lyons, to assess the best locations.
More than one hundred applications were submitted by public authorities. These have now been reviewed by the New Towns Taskforce in a report submitted to Ministers in Summer 2025.
The successful locations for new towns are expected to be announced in the coming weeks. The expectation is that 12 locations will be chosen and an estimated £48bn of public funding will be made available to help build the required infrastructure. Successful locations are reported to include Crews Hill in Enfield, Tempsford in Bedfordshire and Heyford Park in Oxfordshire.
Alongside this investment, the government has also announced new AI Growth Zones (designated sites where businesses are able to benefit from time-limited incentives, accelerated planning processes and specialist infrastructure designed to attract investment from AI companies, including data centres) in Blyth, Northumberland and Cobalt Park, North Tyneside which it is hoped will create new jobs and thereby attract people into these areas.
In a bid to accelerate the pace of delivery, existing awards of public funding made through the Levelling Up Fund, Town Deals and Simplification Pathfinders Pilot Fund have been amalgamated into a single fund (the Local Regeneration Fund) with lighter rules, whilst the government is also pushing to get the £1.5bn Plan for Neighbourhoods programme up and running as soon as possible.
Public funding is often used to undertake works and build infrastructure that then makes sites attractive to the private sector to develop. In most cases this approach is successful and therefore the expectation is that these announcements will help unlock further development.
3. New Mayoral Development Corporations
The government looks set to approve at least five new Mayoral Development Corporations in the coming months.
Mayoral Development Corporations are statutory bodies that can be created by the Secretary of State, in response to an application submitted by a Metro Mayor, in order to drive the regeneration of a particular area. Under Section 201(2) of the Localism Act 2011, an established Mayoral Development Corporation “may do anything it considers appropriate for the purposes of its object or for purposes incidental” to achieving their objective. This often involves taking on responsibilities from other public authorities (such planning duties, having the power to undertake compulsory purchases of land or the ability to offer discretionary relief from business rates). It is also common for there to be public funding awarded to the Corporation to enable the remediation of sites, to construct new buildings and to offer incentives for investment. The government has recently tightened the governance requirements upon these organisations, including publishing new guidance around scrutiny arrangements.
Although only six Mayoral Development Corporations have been developed since 2012, plans are afoot to create at least another five, with Mayoral Development Corporations being proposed for:
- Central Birmingham (including the £3 billion Birmingham Sports Quarter, the £4 billion Birmingham Knowledge Quarter, the HS2 station at Curzon Street, the £2 billion Smithfield development, and a major creative industries hub in Digbeth);
- Oxford Street in London;
- the area Manchester United’s stadium at Old Trafford;
- Middleton in Greater Manchester (with this Mayoral Development Corporation expected to be co-chaired by the actor and comedian, Steve Coogan).
On 23 September the North East Combined Authority cabinet approved plans to designate a Mayoral Development Zone across sites in Newcastle and Gateshead, a stepping stone to creating one or more Mayoral Development Corporations. The Mayoral Development Zone will cover sites in both Newcastle and Gateshead, including “the proposed international conference centre and arena on the Gateshead Quayside, Gateshead High Street and Newcastle’s Forth Yards area, as well as any potential regeneration works surrounding a new football stadium if Newcastle United were to leave St James’ Park“.
4. Creating more efficient processes
The government believes that it currently takes too long for development to begin on site. To reduce the time taken, it is pushing through changes to the planning system that will make it easier for developers to build homes under the Planning and Infrastructure Bill, which is due to be given Royal Assent towards the end of the year. It has also been promoting the use of artificial intelligence programmes to streamline processes.
Steve Reed is now looking to go further and has announced he will shortly unveil a “building acceleration package” to speed up the rate of house building across the country. Although details of the package have yet to be revealed, there is speculation that it will involve steps to simplify building safety regulations guidance. It is also anticipated that interventions may be announced to help make it easier to build on urban “brownfield” land and to tackle “landbanking” – where developers buy land but delay building on it.
Conclusion
Whilst the initial figures on housebuilding under the Labour government may appear discouraging, the overall direction of travel appears positive. In particular, the government recognises that the current rate of delivery is “unacceptable” and is signalling its intent to unlock development at scale through renewed ministerial focus, the expansion of Mayoral Development Corporations, cutting red tape and directing public funding towards building infrastructure. Provided these measures are implemented effectively, they could mark a turning point in achieving the ambition to “get Britain building” — not just in rhetoric, but in results.
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