Weekly planning news
Planning news - 5 March 2026
OBR forecasts housebuilding dip - before planning reforms drive long-term rise
The UK’s fiscal watchdog - the Office of Budget Responsibility (OBR) - has increased its forecast for housebuilding over the next five years, citing the expected impact of government planning reforms - although delivery is expected to fall in the short term before recovering later in the decade.
This news comes following the latest planning application figures1 from TerraQuest which reveal that 2025 was the strongest year for a decade for applications to build new homes.
In its Economic and Fiscal Outlook2, the Office for Budget Responsibility has predicted that 30,000 more homes will be built between 2025-26 and 2029-30 than it forecast at the Autumn Budget. This would bring cumulative net additions to the UK housing stock to around 1.3 million homes over the five-year period.
However, the OBR also expects housebuilding to decline temporarily. Net additions are forecast to fall from an average of around 260,000 homes per year in the early 2020s to approximately 220,000 in 2026-27, largely due to subdued housing starts feeding through the development pipeline, as reported in Building Design3.
Despite a short-term slowdown, the OBR expects delivery to increase significantly towards the end of the decade, with annual net additions rising to just over 305,000 by 2030-31. The watchdog said this improvement would reflect the impact of recent planning reforms, although it noted that their effect has yet to materialise in actual delivery figures.
Sector figures have cautioned that planning reform alone will not be sufficient to deliver the scale of housing required. Speaking on the release of TerraQuest's recent Planning Application Index4, Geoff Keal, TerraQuest CEO, said
“Housing submissions are returning to levels not seen for several years, which is a genuinely encouraging sign that confidence is rebuilding across the sector.
“But intent alone isn’t enough - the focus must now be on ensuring viable sites can move from application through to construction, so this renewed momentum results in homes being built.”
Others have pointed to broader financial and delivery pressures in the sector.
Brian Berry, CEO of the Federation of Master Builders5, warned:
"The rising number of planning applications for new build units is positive, it clearly shows a level of trust in the Government's plans for new housing. FMB data has shown confidence among SMEs is on the rise for 2026 - so clearly a government that is pro-building can make a difference, even if we don't fully know the impact of the changes to the planning system.”
“However, despite a rise in applications, the attrition rate from applications to actual new homes is high, so we probably won't see over 300,000 homes being built this year. The Government’s ambition to build 1.5 million new homes remains a deeply ambitious stretch target. SME housebuilders are still struggling to get homes built as evidenced by the long-term decline in the percentage of all new homes built by SMEs – now under 10%.”
Visit our Planning Application Index series for the latest on national housing trends6.
Temporary accommodation costs for councils projected to rise sharply
The cost to local authorities of housing homeless households in temporary accommodation is expected to increase significantly over the coming years, placing further strain on council finances and highlighting wider pressures within England’s housing system.
According to the Guardian7, analysis by the Local Government Association (LGA) has shown councils’ spending on temporary accommodation (TA) is projected to more than double to almost £4bn by 2029–30 if current trends continue. The LGA warns that rising demand for homelessness support combined with limited reimbursement from central government is creating a growing funding gap for local authorities.
Temporary accommodation is used by councils to house homeless households while longer-term housing solutions are found. This can include hotels, bed-and-breakfasts, and self-contained flats.
The scale of demand has increased markedly in recent years. More than 130,000 households are currently living in temporary accommodation in England, including 175,990 children, the highest figure on record. The number of children living in TA increased by more than 12,000 in the past year alone, reflecting sustained pressure on local authority housing services.
These rising numbers have translated into rapidly increasing costs. In 2024–25, councils spent £1.27bn on temporary accommodation but were reimbursed £911m through housing benefit payments from the Department for Work and Pensions (DWP). This left a funding gap of nearly £360m that councils had to cover from their own budgets.
The LGA estimates that the annual cost borne directly by councils could increase by 65% over the next five years, rising from around £360m to £595m.
A key factor behind the rising financial burden is the way temporary accommodation costs are reimbursed. Local authorities can only claim back 90% of local housing allowance (LHA) rates set in 2011, despite rental prices having increased significantly since then.
As a result, councils are paying a growing proportion of temporary accommodation costs themselves. Since 2017–18, local authorities have spent almost £1.5bn more on temporary accommodation than they have been reimbursed by the government.
The statutory duty to co-operate in plan-making will be revoked on 25 March 2026
The 25 March 2026 date was set out in The Levelling-up and Regeneration Act 2023 (Commencement No. 11 and Saving and Transitional Provisions) Regulations 20268, which were laid before Parliament. These regulations bring relevant provisions of the Levelling-up and Regeneration Act 2023 into force and remove Section 33A of the Planning and Compulsory Purchase Act 2004, which established the statutory duty to cooperate.
Introduced under the Localism Act 2011, the statutory duty to cooperate required neighbouring local planning authorities and other prescribed bodies to work together on strategic issues that cross administrative boundaries. These include matters such as housing need, infrastructure and environmental planning.
However, concerns have grown that the requirement has slowed the local plan system introduce transitional arrangements between the existing plan-making framework under the Planning and Compulsory Purchase Act 2004 and the new system created by the Levelling-up and Regeneration Act (LURA) 2023.
Under the changes, the current plan-making legislation will remain in place for authorities progressing plans through the existing system, except for Section 33A, which establishes the duty to co-operate.
The regulations also set out how the transition to the new plan-making regime will operate. Existing development plan documents adopted before 25 March 2026 will continue to form part of the development plan until they are replaced by new local plans.
Supplementary planning documents will also remain in force during the transition, but no new supplementary planning documents can be adopted after 30 June 2026.
The government has additionally confirmed that 31 December 2026 will be the final date for submitting a development plan document for examination under the current plan-making system, although the secretary of state retains the power to allow a later deadline.
The removal of the duty to co-operate forms part of wider reforms to the planning system under LURA, which aim to streamline local plan preparation. Earlier proposals included introducing a 30-month timetable for producing new-style local plans, including the examination stage.
- https://www.terraquest.co.uk/news-and-insights/q4-2025-index
- https://assets.publishing.service.gov.uk/media/69a6d7b62e1f4fbda4252208/economic-and-fiscal-outlook-march-2026-web-accessible.pdf
- https://www.bdonline.co.uk/news/obr-predicts-net-additions-to-housing-stock-will-fall-to-220000-next-year/5141102.article
- https://www.terraquest.co.uk/news-and-insights/q4-2025-index
- https://www.fmb.org.uk/
- https://www.terraquest.co.uk/news-and-insights/q4-2025-index
- https://www.theguardian.com/society/2026/mar/03/council-temporary-housing-costs-more-than-double-2029-30-lga?utm_source=chatgpt.com
- https://www.legislation.gov.uk/uksi/2025/1370/contents/made
