Build or face consequences: Government's bold proposals to accelerate housing delivery – technical consultation

(5 min read)

The Government continues to look for new ways to accelerate housing delivery. The proposals in its recent consultation on build out include mandatory build-out statements, annual progress reports and Delayed Homes Penalties for slow developers. Reforms also include the wider use of compulsory purchase orders and mixed tenure thresholds for larger sites. Whilst aiming to boost transparency and accountability, these measures risk adding complexities and increased financial strain for developers, especially in challenging market conditions. The consultation closes on 7 July 2025 so do have your say.

The Government has published a Technical Consultation on implementing measures to improve Build Out transparency and an accompanying Planning Reform Working Paper on Speeding up Build Out, with responses to the Consultation due by 7 July 2025.

The two papers set out a series of ambitious proposals to accelerate housing delivery. Some of the proposals are new and some involve switching on powers already on the statute book in the Levelling-up and Regeneration Act 2023 (LURA).

The overall message from the Government is clear: get on and build homes or face consequences but the question is whether there will be unintended consequences; namely more process and more hurdles for developers already facing severe viability challenges.

Technical Consultation: Implementing Measures to Improve Build Out Transparency

The Consultation proposes:

That a build-out statement must accompany planning applications, describing the party responsible for the development, setting out a site build-out projection with timelines and responsibilities, a rationale for the projection (including site constraints) and details of the proposed housing tenure mix, and any known risks affecting progress;
The switching on of the commencement notice provisions in LURA which will require a commencement notice to be served before development is commenced that confirms the expected and actual start dates; and
A requirement for Annual development progress reports to be provided for the duration of the build-out process.

It’s proposed that the new rules will apply primarily to developments of 50 or more dwellings and the Consultation seeks views on whether this is an appropriate threshold and whether the new rules should also apply to specialist housing types such as student accommodation.

The Consultation states that, if permission is granted, the timelines in the build-out statement may serve as the ‘pre-agreed’ benchmarks against which progress reports will be judged and potential Delayed Homes Penalties assessed. This will encourage developers, and their lawyers, to ensure that the build-out statement provides maximum flexibility, although you can see it becoming a document that is negotiated with the authority as part of planning application process. The risk is that the new rules add another document and another process, adding additional complexity to the application process.

A new statutory condition will require the submission of annual progress reports and guidance will be published that encourages the inclusion of a condition on the planning permission requiring the updated build-out projections to be approved by the planning authority before development begins.

Powers under the Levelling Up and Regeneration Act 2023

Two years since it received Royal Assent there are plenty of provisions in the LURA that haven’t been brought into force. The Consultation includes a proposal to switch on the power for LPAs to refuse planning applications from individuals who have previously obtained permission for a similar development on the same site but have not progressed it at a reasonable rate. It is proposed that the rules will apply to both the person who submitted the original and new application and a connected person so that the rules can’t be avoided by getting another company in the same group to submit the new application. In deciding whether a repeat application should be refused, authorities will have regard to the dates specified in the commencement notice and the timescales described in build out statements and development progress reports.

Planning Reform Working Paper: Speeding Up Build Out

Delayed Homes Penalty – A solution or a new set of problems?

The Working Paper states that the government is “exploring the possibility” of introducing a new tool for local authorities: the “Delayed Homes Penalty”. This doesn’t sound like it’s a done deal and informed and evidenced industry feedback may yet see this off but let’s look at what is proposed.

The proposal is that the DHP would allow local authorities to impose financial penalties on developers or landowners who fall “substantially behind” timelines, set out in the agreed build-out statement, without "reasonable justification". Developers delivering 90% or less of the agreed build-out schedule would have to justify delays to the local planning authority, and if the delays cannot be shown to have been caused by external factors, such as severe weather or unexpected site issues, then developers may face a penalty.

The DHP would apply to sites exceeding a certain size threshold (which is yet to be determined) and would charge developers or landowners for each delayed home, with penalties calculated as a percentage of the house price or by reference to local Council Tax rates.

Further guidance is needed on how the DHP would work in practice. For instance, how will it account for phased developments or changes in land ownership? How will collected funds be used, and do local planning authorities have the resources to track and enforce delays?

The risk, as with build-out statements, is that another procedural layer is added that slows down the planning and development process. We’re at a point in the economic cycle where viability is challenging, and while the government wants developers to have a laser focus on delivery, it might find that the avoidance of financial penalties becomes the main focus – which is not the intended consequence.

Alongside the DHP, the government is also proposing to switch on the revised completion notice procedure set out in LURA. It will enable a local authority to serve a completion notice, if it considers that a development will not be completed within a reasonable time, without the need for the Secretary of State to approve it. No detail is provided as to what is meant by a “reasonable time” but, presumably, it will be aligned with the tests that would enable a DHP to be levied so that a slow build out could provide developers with a double whammy: a financial penalty and a removal of planning permission. Responses to the consultation must surely resist this.

Compulsory Purchase Orders

Reforms to the use of compulsory purchase orders (CPOs) are firmly on the agenda, with the Government intending to implement reforms introduced by LURA to allow the conditional confirmation of CPOs. The aim is to de-risk the use of CPOs on stalled sites, and to take the sting out of alternative development proposals for a site in the decision whether to confirm the order. Secondary legislation is expected later this year to bring these changes into effect.

Mixed Tenure Thresholds

Finally, the Working Paper highlights that sites with higher levels of affordable homes or Build to Rent housing are delivered at a faster rate. The Government is proposing a partnership model, potentially requiring sites above a certain size (e.g. 500 units) to adopt a mixed tenure approach. The Consultation seeks views on the appropriate threshold above which sites must deliver on a mixed tenure basis.