Things can only get better: Labour’s 2026 planning reforms

An incoming Labour Government, after a long period of instability, has won a resounding parliamentary victory. Charged with reforming the many issues facing the country, the electorate has put its confidence in a new Labour Prime Minister to offer new ideas, policies and confidence. The year is 1997, and the United Kingdom is now a "new and confident land of opportunity" under the Blair Government.

Fast-forward to 2026, and the Starmer Labour Government finds itself facing similar challenges to New Labour in the planning and property development space. Professor Philip Allmendinger of the University of London notes that Blair's New Labour entered power with inherent tensions on planning matters, torn between being a traditional party of production, championing good jobs, manufacturing and affordable housing, while also catering to a new 'Middle England' constituency, concerned with the environment and preserving local spaces. But how does this compare to our present government?

The Starmer Government's broader political mission, to deliver 1.5 million homes in England during this Parliament, while introducing a return to strategic spatial planning, constructing a series of 'New Towns' and establishing the Nature Restoration Fund as a national environmental policy, comes with inherent tensions. Local communities may be disempowered, while environmental concerns may be put to one side, to prioritise economic growth, house-building and delivery of major infrastructure projects. The government in time will recognise that you cannot please everyone when introducing planning reforms. But what does this mean in practice for developers and landowners?

The return to strategic planning

The reformist Minister for Housing, Communities and Local Government, Matthew Pennycook MP, has been explicit that planning in England has been carried out on a scale too local to identify effective growth locations or coordinate infrastructure across boundaries.

In response, the government now proposes to reintroduce a binding strategic tier through 'Spatial Development Strategies', produced by combined and strategic authorities (or joint boards), with local plans required to be in general conformity. Reforms of this nature may be motivated by the demonstrated success of bodies like the Greater Manchester Combined Authority in delivering economic growth through house-building and commercial development.

Government consultation materials on the new National Planning Policy Framework (the second large-scale rewrite of the NPPF within this government's term) emphasise that Spatial Development Strategies will be high‑level, strategic documents focused on genuinely cross‑boundary issues, leaving detail to local plans. Alongside this, the plan‑making system is being accelerated with a 30‑month local plan timetable and new draft guidance, measures intended to end the seven‑year plan cycles that have frustrated both communities and developers.

Faster consenting and modernised land assembly

The government also proposes to speed up decision-making processes within statutory planning (the day-to-day decisions made by planning authorities). The government proposes that its Planning and Infrastructure Act 2025 will streamline the consenting process for nationally significant infrastructure projects (NSIPs), mandate more regular updates to National Policy Statements, and narrow judicial review windows to improve predictability for major energy and transport schemes.

On the local development side, modernisation of local decision‑making (including updated planning committee rules and added capacity) and changes to compulsory purchase compensation are intended to unlock land assembly for large, complex, infrastructure‑first sites; crucial if city‑scale regeneration and New Towns are to progress at pace.

Further proposals include establishing a 'default yes' to suitable homes around rail stations (as we have previously noted, watch this space for any pairing of Network Rail’s plans for housebuilding with the government’s New Towns). The explicit link to these policies is the government’s mission to get to 1.5 million homes by the end of the Parliament.

The Nature Restoration Fund: strategic environmental delivery

The Nature Restoration Fund is one of the most innovative part of the government's reforms, to unlock delays from the inability of individual developments to appropriately achieve 'nutrient neutrality', among other environment effects. Described by some as a "polluter pays" reform, the new model proposes Environmental Delivery Plans for a defined area, where developers can discharge certain environmental obligations by paying a levy into the Nature Restoration Fund, which Natural England uses to deliver strategic conservation measures at landscape scale.

The government argues that the current site‑by‑site mitigation approach too often delays development while failing to reverse environmental decline; the Nature Restoration Fund is designed to consolidate funding, reduce duplication, and produce measurably better outcomes for protected species and habitats.

The government appear to be initially focusing its plans on nutrient neutrality measures but have also flagged protections for great-crested newts, with a role for landowners to play in establishing protected pond habitats on land, as a 'direct action' model of environmental protection, presumably accompanied by some plan for landowner payments to carry out these works.

The government has clarified that Environmental Delivery Plans will not replace the statutory requirement for biodiversity net gain, which sits outside the Nature Restoration Fund.

While recognising the government is correct that site-by-site mitigation can delay development, it is too early to tell whether the Nature Restoration Fund will be a successful alternative for landowners or developers. The government indicates levies under the scheme will be analogous to CIL, which was designed as a centralised charge to replace section 106 contributions (this has been unsuccessful, with CIL and section 106 contributions now co-existing as a cost of development). Further detail is required as to how allocations of development for an Environmental Delivery Plan will work, and how the mitigation sites will operate, with further considerations on additionality and double-counting with respect to other government schemes. Secondary legislation should emerge in time to allow further analysis of the government's plans in this space.

New Towns: a return to large‑scale placemaking

New Towns such as Stevenage and Milton Keynes tend to be remembered as a success of post-War Britain. It is no surprise that the Starmer Government has seen this as an opportunity for a new generation of New Towns.

The government’s New Towns Taskforce initially recommended 12 candidate locations for a new generation of New Towns (since revised down to seven), each with at least 10,000 homes, ambitious affordable housing shares and 'infrastructure‑first' sequencing. Ministers have committed to begin building in at least three New Towns during this Parliament, undertaken a Strategic Environmental Assessment to finalise choices, and created a New Towns Unit to coordinate across departments and unblock barriers to delivery.

The government is proposing stronger development corporation and compulsory purchase powers and clearer national rules favouring density along rail lines and other transport networks. These features are meant to solve long‑standing bottlenecks on land assembly, sequencing of utilities and transport, and viability under high design and affordable standards – so that New Towns can move from plan to delivery.

The funding for these New Towns remains opaque. The government appears to believe this will be led by the private sector. However, as anyone familiar with long-term development knows, such as the Duchy of Cornwall's work on Poundbury and Nansledan, the proof is in the detail in actually being able to finance and deliver projects of this scale.

Implications for developers, landowners and investors

All of these reforms are ultimately judged against a single metric: 1.5 million net additional homes in England during this Parliament. The government’s narrative is that restoring strategic planning, embedding pro‑density rules, adding planning capacity and creating an environmental pathway will all assist in encouraging house-building. However, initial signs do not indicate an upswing in planning applications or permissions being implemented to date.

However, the government has expressed a reasonably clear direction for travel, which industry has recognised and appreciated.

For developers, the reforms deliver clearer strategic signals on where growth will be welcomed and a more rules‑based approach to urban density, especially around stations. Faster consenting for nationally significant infrastructure should assist with grid connections and rail‑connected schemes. The Nature Restoration Fund, in theory, offers a route to resolve environmental constraints through predictable levy‑based costs when Environmental Delivery Plans are in place, potentially accelerating delivery in nutrient‑affected catchments.

For landowners, alignment to Spatial Development Strategies means clearer long‑term value signals where land lies within strategic growth corridors or New Town footprints. Land with strong natural capital potential may benefit from environmental revenue streams linked to Environmental Delivery Plans (think degraded or low-grade farmland which may be suitable for reforestation or afforestation projects, although habitats come in many forms, including waterways and grasslands).

For investors, the government hope to encourage investment through signalling its direction of travel and demonstrating that it is investor friendly. Expect to see more 'calling in' of significant applications as a signal to the market, that housing schemes, data centres and renewable energy projects are welcomed by this government.

Conclusions: living the past and not learning from it

The government's success depends on whether its various reforms can actually lead to an uptick in house-building.

Professor Philip Allmendinger notes that when reviewing past planning inquiries, give or take a few issues relating to climate change and globalization, most could apply to any later government. Planning policy reform is less at a crossroads than a roundabout, given that each government's reforms focus upon the same issues and grapple with the same tensions and options. When major reforms to planning are introduced, they often seek to reduce planning and then subsequently expand it, each change establishing a different approach for a few years that is inevitably reformed again a short time later.

Like any government, Starmer's Labour must consider many interests and communities that will both drive policy and temper it. Perhaps the key takeaway for landowners and developers is that the only certainty in 2026 and beyond from the Starmer Government is more planning reform – whether that is less regulation, more regulation, or a new swathe of policy documents (with accompanying acronyms) to analyse and apply to future schemes.

Within planning policy, plus ça change remains the rule of the day, but there are legitimate opportunities emerging with respect to New Towns, large-scale energy and data infrastructure and brownfield house-building schemes for investors, landowners and developers.

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

© Farrer & Co LLP, March 2026