Navigating the new National Planning Policy Framework: A balanced perspective

The government’s new National Planning Policy Framework (NPPF) has introduced significant changes that will impact developers across the UK.

While these revisions aim to streamline the planning process and address the ongoing housing crisis, they also present new challenges, particularly in terms of environmental regulations and housing targets. To explore the full impact of these changes, Polly Clifton, Waterman’s environmental expert, highlights both the advantages and potential obstacles developers are likely to face under the new framework revisions.

Economic context: Government spending and private sector struggles

Economic growth in the UK remains heavily influenced by government spending, but the economy continues to face significant headwinds. As previously reported, the Budget increased total public sector capital expenditure to £131bn in 2025/26 (a 13% increase compared to 2024/25), including funding for HS2’s extension to Euston, the schools rebuilding programme, expanding prisons, healthcare, and defence. However, the private sector’s outlook is less optimistic, with increases to Employer National Insurance Contributions significantly damaging business confidence. For developers, this mixed economic climate creates additional challenges. Some developers with cash reserves are pushing forward with speculative schemes, while others, particularly those reliant on debt financing, are taking a ‘wait and see’ approach, hoping for a reduction in interest rates and inflation.

In the residential sector, concerns remain about securing planning approval due to the new Building Safety Act and its associated costs. The government’s push to deliver 1.5 million homes over the next five years presents a significant challenge, as planning permissions for new homes are 42% below the peak recorded in 2016/17. Planning for 240,000 homes was granted in 2024, and in 2025, the figure is expected to fall further to 200,000 – well below the target of 370,000 per year. Despite these challenges, the government has set out a series of strategic policy changes aimed at revitalising the sector, including increased housing targets, local authority requirements for five-year land supply, and the prioritisation of brown and Grey Belt sites for development. The government is also formulating plans to reform the planning system, and in December 2024, they published the revised National Planning Policy Framework (NPPF) which sets out their planning policies for England and how these are expected to be applied.

Mandatory housing targets: Demand vs. viability

The government has introduced ambitious housing targets in an effort to address the UK’s ongoing housing crisis. These targets set mandatory goals for England’s councils to build 370,000 new homes per year, with a focus on high demand areas and Grey Belt land.. While this policy is seen as a positive step toward increasing housing stock, it also raises questions about viability.

Pros: This represents an opportunity for Local Planning Authorities to set their own affordable housing targets, whilst potential Green Belt development could enable the delivery of more affordable housing than would otherwise apply.

Cons: The downside, however, is the pressure to meet these targets. Navigating stringent environmental regulations can be challenging, and we can create thousands of new sustainable homes on brownfield land close to our city centres, but with the challenge of low land values, flood risk, and decontamination costs, there will be inevitable viability gaps. Furthermore, the push to meet housing demands could lead to overdevelopment in certain areas, potentially creating housing that does not align with the needs of local communities.

Brownfield development: Unlocking potential vs. land availability

The NPPF places a strong emphasis on brownfield development, encouraging the re-use of previously developed land rather than expanding into greenfield sites. This push aligns with broader environmental goals by reducing urban sprawl and making more efficient use of existing urban spaces.

Pros: For developers, brownfield sites present unique opportunities. These areas are often located in desirable urban locations with access to key infrastructure, making them prime for redevelopment. Brownfield sites can also come with the advantage of being close to city centres and transport hubs, making them highly attractive for housing projects. The government has promised financial support to help clear and redevelop these sites, which can make such projects more financially viable for developers.

Cons: On the flip side, brownfield sites can come with their own set of challenges. They are often located in dense urban areas and on contaminated land which may require significant remediation before development can begin. These additional costs can be a barrier for smaller developers or those with limited resources. Additionally, the availability of suitable brownfield land is limited, particularly in highly urbanised areas, meaning developers and LPAs would struggle to find enough sites to meet housing targets.

Environmental Standards: Sustainability vs. costs

The updated NPPF includes a new reference to a ‘net-zero future’, rather than a low-carbon future, with planning needing to take ‘full account of all climate impacts, including overheating, water scarcity, storm and flood risks, and coastal change’. These changes reflect the growing importance of climate action and environmental responsibility within the development sector.

Pros: Many developers recognise the importance of meeting sustainability standards, not only to align with government policy but also to attract environmentally conscious buyers. With growing demand for sustainable homes, developers who integrate green building practices into their projects may see long-term financial benefits, including higher demand and potentially higher sales prices.

Cons: However, meeting these higher environmental standards comes with added costs. Sustainability often requires additional investments in energy-efficient technologies, green materials, and infrastructure, and these upfront costs can make projects less financially viable, particularly for developers already facing pressure to meet housing targets.

Green Belt and Grey Belt Land: Preservation vs. development pressure

One of the most controversial updates to the NPPF is the reclassification of certain Green Belt land into ‘Grey Belt’, making it eligible for development under specific circumstances. This shift has sparked concerns about the potential for overdevelopment in protected areas.

Pros: For developers, the reclassification of Green Belt land offers new opportunities. By allowing development in areas previously off-limits, the NPPF opens-up new land for housing projects. This could help meet the housing targets, particularly in areas where urban sprawl is already occurring. This change also aligns with the government’s desire to address housing shortages by increasing the land available for development.

Cons: On the other hand, there are significant concerns about the long-term environmental impact of developing previously protected land. While provisions in the NPPF to deallocate parts of the Green Belt to ‘Grey Belt’ include some caveats and protections for nature, the overall risk to the Green Belt is likely to be heightened from a nature perspective. The challenge for developers will be to carefully consider the environmental impact of such developments and to ensure that they do not undermine the long-term sustainability of the areas in which they build.