The Office for Budget Responsibility (OBR) has just released a report predicting that housebuilding will soon hit its highest level in 40 years - a claim bold enough to raise a few eyebrows (and hopefully, a few rooftops too).
The secret weapon behind this potential boom? Planning reforms, alongside strategic investments that aim to tackle the housing crisis, boost economic growth, and create jobs. After years of red tape, delays, and planning disputes, the government has introduced sweeping changes to how and where homes can be built. And, according to the OBR, these changes could unlock an extra 170,000 homes over the next five years.
But before we start celebrating with hard hats and high-fives, there’s a big question to answer: will these planning reforms actually work? After all, the UK’s housing market has been notoriously stubborn, with land shortages, NIMBY opposition, and construction workforces stretched thin.
In this article, we’ll dive into what the OBR’s forecast really means, how the new planning rules could shake up the industry, and whether this is a genuine turning point - or just another overly optimistic projection.
Ready to find out if we’re on the brink of a housebuilding revolution - or just another round of empty promises? Let’s take a look.
OBR's Housebuilding Forecast: A 40-Year High
The OBR projects that housebuilding in the UK is set to increase by 30% by 2029-30, adding 170,000 additional homes beyond previous forecasts (OBR, 2025). If this prediction holds, we could see the highest housebuilding levels in four decades.
While the OBR is forecasting a surge in housebuilding, recent figures from the Ministry of Housing, Communities & Local Government (MHCLG) suggest a more complicated reality. Planning applications have dropped to their lowest levels since the pandemic, raising the question: how will housebuilding hit record highs if fewer developments are even making it past the first hurdle?
This dip in applications points to ongoing challenges - economic uncertainty, high borrowing costs, and a planning system still plagued by delays. If the reforms are to deliver the housing boom the OBR expects, they’ll need to address these deeper structural issues.
The government is confident that policy changes will speed things up, but with planning activity at a low ebb, it remains to be seen how quickly these reforms will translate into shovels in the ground.
Economic Impact
The expected surge in housebuilding could inject £6.8 billion into the UK economy by 2029-30, boosting GDP by 0.2%. With construction being a major economic driver, this growth could ripple through various industries, from materials suppliers to skilled trades (Gov.uk, 2025).
Long-Term Housing Market Benefits
The government has set a goal to build 1.5 million new homes by 2029-30. The OBR believes planning reforms will play an important role in achieving this target, potentially stabilising property prices, improving affordability, and easing the UK’s chronic housing shortage (Gov.uk, 2025).
The Planning Reforms Driving Growth
1. Major Updates to the National Planning Policy Framework (NPPF)
The government has overhauled the National Planning Policy Framework (NPPF) and other key policies to speed up housing approvals and increase land availability.
Key changes include:
- Removing recent restrictions on the ‘Presumption in Favour of Sustainable Development’, making it easier for local planning authorities (LPAs) to approve housing even if they have recently adopted local plans.
- Updating Green Belt policies, allowing construction on low-value “grey belt” land while preserving high-quality green spaces.
- Adjusting the standard method for calculating housing need, shifting where new homes are planned to better reflect actual demand and regional growth priorities.
These updates aim to address planning bottlenecks that have long hindered housing supply growth (Gov.uk, 2025).
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?
Even with the planning reforms in place, there’s one major question looming over this housebuilding boom: who’s actually going to process all these planning applications?
LPAs are already stretched thin - understaffed, underfunded, and about to be hit by a wave of applications as developers rush to take advantage of the new rules. And just to make things even more interesting, LPAs are also facing major structural reform, with the introduction of nationwide unitary authorities and regional planning strategies shaking up the system.
The government has promised extra funding to help councils cope, but in reality, it amounts to covering one extra planning officer per LPA for a year - hardly enough to make a dent in the backlog. It’s like handing out a single sandbag to stop a flood.
While the government is betting that streamlining policies will lead to faster approvals, there’s a real risk that a backlog of applications could build up, leaving developers waiting in limbo. After all, policy changes are one thing - having the manpower to implement them is another entirely.
Will these reforms actually speed up housebuilding, or are we about to see a planning bottleneck of epic proportions?
So, Are We on the Brink of a Housebuilding Revolution?
With the OBR’s optimistic forecast, major planning reforms, and substantial government investment, the UK’s housing sector could be poised for a historic boom. If these policies succeed, they could boost supply, stabilise prices, and finally deliver on long-standing housing promises.
However, challenges remain. NIMBY opposition, workforce shortages, and planning bottlenecks could still slow progress. And, as history has shown, ambitious housebuilding targets often face real-world obstacles.
Stay informed
Staying on top of all the latest industry news isn't easy, but it can be. Click the button below to subscribe to our newsletter and be the first to know about industry insights, product updates, events and more.
