Home sweet boom: how will the Labour Government’s plan for new towns affect the placemaking sector?

The King's Speech delivered soundbites on the new Government's priorities for the coming months. What do Labour’s proposals offer for the placemaking and legacy development sector?

It’s clear that Labour’s prime goal is economic growth, and key to this in the pre-election manifesto and rhetoric was the drive to build 1.5 million new homes. The lack of emphasis on housebuilding and the absence of any mention of new towns in the King’s Speech was therefore surprising but the “get Britain building again” slogan was repeated, together with a pledge for planning reforms to accelerate housebuilding.

The detail and the drive for delivering the promised “high quality housing and infrastructure” will follow. In May 2024 Angela Rayner set out Labour’s aim to create a New Towns Commission within six months of coming to power, with potential sites designated within a year.

Those landowners and developers which focus on longevity, sustainability, stewardship and impact driven placemaking and legacy development will see potential in the new Government’s early commitment to housebuilding and new towns.

Collaborative housebuilding

The emphasis in the King’s Speech on greater devolution of decision-making and supporting local growth plans underlines the Labour manifesto promise for local communities “to shape housebuilding in their area”.

The importance of engagement and discussion with the local community has long been the guiding philosophy in placemaking and legacy development, to enable the design and delivery of a neighbourhood in which people want to live, work, participate and play.

Learn more about the importance of placemaking to create vibrant and resilient communities.

Strategic site selection and preservation

Labour’s pre-election housing plan promised to boost public services and infrastructure and protect green spaces. Although the proposed strategic approach to using green belt land for development has led to headlines about a “green belt gold rush”, in reality the new Government advocates a “brownfield” first approach followed by prioritising "grey belt" land (“wastelands and old car parks located on the green belt”) with a regime of “golden rules” (undefined as yet) to benefit both nature and local communities.

The need for a strategic use of the green belt is realistic if more homes are to be delivered, and the opportunity to use “grey belt” land, with an overarching drive to protect green spaces, offers potential for the creation of new towns in appealing locations where a placemaking approach could focus on architectural design, quality and sustainability to enrich the natural environment.

Building for the future

A key facet of placemaking and legacy development is of course sustainability and longevity. The King’s Speech did not include any net zero or sustainability pledges, but acknowledged the climate emergency. Previously the Labour manifesto proposed to “implement solutions to unlock the building of homes affected by nutrient neutrality without weakening environmental protections”.

A more relaxed nutrient neutrality framework will reduce development costs and simplify the planning process for new towns, while the government’s recognition of the need for environmental protection may prompt other sustainability safeguards which would be supported by stewarding landowners.

Diversion of value

There was no mention in the King’s Speech of the contentious proposal to reintroduce “land value capture” (LVC), which helped boost development of large-scale new towns in the post war period. LVC aims for the uplift in the value of land following planning permission to be spent on public aspects (like schools, doctor surgeries, infrastructure) rather than enriching the landowner or developer.

If an LVC regime is introduced, the erosion in profit margins will of course deter some housebuilders. Nevertheless, placemaking is built around the public features of the new communities that are created; a proposed reassignment of land value may simply reflect the established practice for legacy developments in reality.

The new Government’s proposals for new towns and housebuilding hopefully offer promising opportunities for legacy developers and landowners. Labour has a strong majority to drive through its plans; now we wait for the detail about how it proposes to deliver them...

This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.

© Farrer & Co LLP, July 2024