The latest UK house building forecast from the Office for Budget Responsibility (OBR) is a bold one. According to its 2025 report, housebuilding could reach its highest level in 40 years - a claim that should raise eyebrows across the development sector (and hopefully, a few roofs too).
What’s driving this predicted boom? A mix of planning reforms, government investment, and a renewed push to tackle long-standing barriers in the system. After years of slow progress, stalled applications, and policy back-and-forth, the government’s new approach aims to increase land availability, streamline planning decisions, and boost the construction workforce. Together, these changes could unlock an additional 170,000 homes over the next five years.
But the real question is: will these reforms actually shift the dial? Or is this simply another optimistic projection that won’t survive contact with the realities of planning departments, development viability, and market conditions?
In this article, we’ll break down the OBR’s forecast, compare it to real LandTech planning data, and explore what these changes mean for developers navigating the next five years.
OBR's Housebuilding Forecast: A 40-Year High
The OBR projects that UK housebuilding will rise by 30% by 2029–30 — adding 170,000 homes beyond previous forecasts. If correct, this would deliver the highest housebuilding levels since the late 1980s. You can see historical context in our analysis of highest housebuilding levels.
But LandTech’s planning data shows a more complex picture. While the OBR expects a surge in completions, planning activity — the pipeline feeding those completions — has been trending down.
Recent MHCLG data shows planning applications are at their lowest level since the pandemic. And LandTech’s internal planning dataset mirrors this:
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Fewer major residential applications have been submitted over the last 12 months
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Determination periods remain slow
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Approval rates in some regions are flat or declining
This raises a critical question: how can housebuilding hit record highs if planning throughput is still constrained?
The OBR is effectively banking on planning reforms doing a lot of heavy lifting. For this forecast to materialise, the new rules will need to translate into:
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Faster approvals
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More available land
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Greater certainty for developers
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Higher planning volumes
We’re not seeing that shift yet - but the policy foundations are now in place.
Economic Impact
The OBR expects the housebuilding uplift to inject £6.8 billion into the UK economy by 2029–30, boosting GDP by 0.2%. Construction’s multiplier effect means this growth extends across materials, engineering, infrastructure, and skilled trades (Gov.uk, 2025).
Long-Term Housing Market Benefits
With the government targeting 1.5 million new homes by 2029-30, the OBR suggests planning reforms will be essential in reaching it. If successful, the reforms could stabilise prices, improve affordability, and ease chronic shortages. Whether those gains materialise depends on how fully the reforms translate into planning decisions and delivery on the ground.
The Planning Reforms Driving Growth
Planning reform sits at the heart of the UK house building forecast for 2025-2029 - and it’s the main reason the OBR expects building rates to climb.
Several major policy changes are already reshaping the development landscape. Early LandTech data shows slight regional variation, with certain authorities seeing increases in pre-app activity or approval rates since the reforms. While the uplift isn’t yet universal, it’s a signal that the system is beginning to adjust.
You can explore the broader policy context in our guide to legislative changes.
1. Major Updates to the National Planning Policy Framework (NPPF)
Key changes include:
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Presumption in Favour of Sustainable Development reinstated
LPAs now have less flexibility to reject applications where housing need is unmet. -
New Grey Belt policy introduced
Allowing development on low-value, previously developed, or poorly performing land within the Green Belt. -
Updated Standard Method
Rebalancing numbers towards high-demand and high-growth areas, making some regions more attractive for development.
Together, these changes aim to reduce bottlenecks that have held housing delivery back for years.
2. Government Funding & Housing Investment
To support the expected rise in housebuilding, the government has pledged billions in investment:
- £2 billion boost to the Affordable Homes Programme, aiming to increase social and affordable housing construction (The Times, 2025).
- £600 million for workforce training, funding up to 60,000 new construction apprenticeships to combat labour shortages (The Times, 2025).
A System Under Strain: Can Local Authorities Cope?
This is where optimism meets operational reality.
LPAs are entering a period of intense pressure - increased workload, structural reorganisation, and years of under-resourcing are colliding with the government’s expectation of faster delivery.
LandTech’s data shows:
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Worsening decision times in several regions
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Rising backlogs for major applications
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Patchy consistency between planning authorities
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Approval rates stagnating in high-demand areas
See more in our deep dive into planning approval times.
The government has allocated funding equivalent to roughly one extra planning officer per LPA — hardly enough to meet the increased demand. Without real capacity uplift, the system risks hitting a bottleneck long before the OBR’s forecasted peak.
The question isn’t whether developers want to build; it’s whether the system can process the volume.
So, Are We on the Brink of a Housebuilding Revolution?
Possibly - but it’s not guaranteed.
The OBR’s housebuilding forecast is grounded in policy intention, not current planning performance. To reach the projected highs of 2029-30, the planning system will need to deliver faster decisions, more approvals, and significantly more available land.
That’s where LandTech data becomes vital.
By consolidating ownership, planning history, constraints, permissions, and policy changes in one place, LandInsight helps developers:
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Track real planning activity
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Identify viable land opportunities early
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Understand local authority pressures and timelines
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Assess risk as policy reforms take effect
In an environment where policy is shifting faster than capacity, having clarity isn’t just helpful - it’s essential.
FAQ
What is the UK property forecast for the next 5 years?
The OBR forecasts a significant increase in housebuilding by 2029-30, supported by planning reform and investment, though this depends on planning system capacity and economic conditions.
Will building costs go down in 2025 in the UK?
Not significantly. Material and labour costs remain high, though inflation is easing. Productivity improvements from planning reforms may help longer-term.
How many new homes will be built in 2025?
The OBR predicts an upward trajectory but acknowledges that completions will grow gradually. High-volume growth is expected later in the forecast period as reforms bed in.
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