Newsteer’s annual market event took place this week with industry experts gathering to dissect the implications of the Government’s Spring Statement for the property and development sector. The event focused on how a subtly revised housing target and quiet but dramatic shifts in development policy will shape the next four years under the current government.

The event featured a keynote speech from Peter O’Brien, Director of Regeneration and Growth at Hounslow Council, who provided insights into how his borough is positioned for growth alongside and the challenges facing local authorities in delivering housing and infrastructure projects. Hounslow, a progressive borough, remains open for business, actively addressing challenges and exploring opportunities despite the absence of London from much of the Spring Statement discussion beyond Heathrow and the Treasury’s address.

Following the keynote, a panel discussion brought together industry leaders to debate the implications of the Spring Statement. The panel included:

• Caroline Harper – Interim Managing Director, Be First
• Polly Barker – Director of Economics, Prior + Partners
• David Conboy – Director, Newsteer
• James MacPherson – Director of New Business and Sales, Notting Hill Genesis

A quiet but dramatic shift in Housing Policy

The government has doubled down on its commitment to increasing housing supply, with an ambitious target of 1.3 million homes across the UK by the end of Parliament. This reflects a slight reduction from the original 1.5 million goal for just England but still represents a major push toward addressing the housing crisis. The Office for Budget Responsibility (OBR) has projected that the planning reforms announced alongside the revisions to the National Planning Policy Framework (NPPF) in December will drive an additional 170,000 net new homes, largely through increased land release by local authorities.

Significantly, the emphasis is shifting from brownfield redevelopment to delivering homes on former Green Belt land, a move that is expected to facilitate greater housing supply while minimising direct government expenditure. The OBR expects ‘much of the additional development in the next five years is assumed to take place on current Green Belt land’. However, panelists questioned whether achieving planning permission alone is sufficient. Caroline Harper challenged the assumption that planning equals development, noting that securing planning permission is only one part of the equation—investment and infrastructure are equally, if not more, critical.

The market impact and challenges ahead

The increased housing supply is projected to stimulate residential investment, drive property transactions, and stabilize mortgage rates below 5%. The government anticipates that sustained housebuilding efforts will generate agglomeration benefits, especially in urban centers, thereby reinforcing economic growth. However, panelists questioned whether the government is truly prioritising development in the most productive parts of the country – such as London.

David Conboy emphasised that the market, not planning, ultimately creates value. While Green Belt release is seen as a solution, he pointed out that new developments on greenfield sites often lack hospitals, transport links, and essential infrastructure – unlike urban areas, which already have these assets in place. Polly Barker took a more optimistic view on the potential of devolution to support growth but was more cautious about the sector’s  strategic planning skills as more cross-regional collaboration requires expanding planners mindsets beyond rigid site red lines, a skillset not required in almost a decade.

The London Question

One of the most striking omissions in the Spring Statement, alongside net-zero, was London. Despite its economic significance, London’s housing and development challenges were largely overlooked in favour of policies geared toward unlocking development in other parts of the country. The decision to focus on Green Belt release instead of addressing the capital’s complex viability constraints suggests a strategic shift away from prioritising London’s growth.

London faces unique hurdles, including high land costs, a challenging regulatory environment, and the need for dense, high-rise development to meet demand. With 90 schemes currently stalled at Gateway 2, the second stage of regulatory approval under the Building Safety Act, increased cost uncertainty and delay are stifling progress. James MacPherson highlighted the challenge of Section 106 acquisition absence in London, which is caused by strategic decisions to focus on existing stock, leading to development programme cutbacks and a lack of obligation for housing associations to proceed with many new acquisitions.

The panel also noted that the government’s approach to planning and infrastructure reform is not expected to affect viability constraints in urban centres. David Conboy pointed to recent consultations on CPO reform, extending the context where the elimination of hope value to an asset can be justified to any brownfield or allocated residential site. While intended to speed up delivery, the move could provoke further opposition to the CPO process and may not significantly change London’s underlying land economics, where the difference between alternative use value and existing use value is currently minimal.. In contrast, greenfield land sees a significant jump in value—often increasing 10 to 25 times its original worth.

Additionally, a £2 billion extension of the Affordable Homes Programme (AHP) aims to sustain housing delivery beyond its original March 2026 deadline. However, current delivery successes outside of London compared with the GLA’s poor record of delivery to date  suggests a shift in funding allocation  toward areas outside of London is likely, raising concerns about whether the capital will receive adequate support to meet its affordable housing needs.

Beyond Housing: Defence and Infrastructure investment

The Spring Statement also included notable commitments beyond housing, particularly in defenceA £2.2 billion increase in defence spending will include refurbishment of the naval base in Portsmouth and investment in defense innovation. These measures are expected to create new housing and development opportunities, whilst also increasing demand for logistics and industrial space.

A pro-development stance—with limits

While the government’s rhetoric is strongly pro-development, the OBR’s analysis suggests that London’s challenges are being viewed as too costly to solve within the current fiscal framework. Instead, the government is betting on market-driven solutions to unlock development outside the capital. The Planning and Infrastructure Bill is now a very high-stakes piece of legislation as to oppose it is to oppose the government’s strongest economic growth driver.

The panel concluded with a discussion on what they would have liked to see in the Spring Statement. A common concern was London’s absence from the housing policy discussion, noting that its problems require capital investment to resolve alongside regulatory reform.. They urged the Treasury to take a more strategic view, similar to its approach to defence, and provide more tools to unlock development across the country – including in London.

With only one mention of London in the entire statement – Heathrow, this is clearly a choice. Is the government clearing the ground for the Mayor of London to make a significant London-focused announcement in the coming weeks? The forthcoming Long-Term Housing Strategy and Defence and Industrial Strategy will be clearer signposts on the detail of the government’s thinking alongside the spending review in June. 

#OurSteer: The government’s current strategy may get Britain building, outside of the M25. But to get Britain really growing, it needs to address London’s challenges.