What’s else is in store for the built environment in 2025?

Last month, I explored three key built environment-related Bills that are set to dominate the parliamentary calendar this year. But beyond these Bills, several other major policy announcements will shape the sector this year. From the Government’s long-term Housing Strategy to the Spending Review and long-awaited leasehold reform, here is what else to watch for in 2025.

Housing Strategy

Labour’s promised 10-year Housing Strategy, expected to be published next month, is set to outline long-term priorities for housing policy, focusing on regulatory stability, building remediation, and attracting international investment. With a strong emphasis on delivering the Government’s flagship 1.5m new homes over five years, this strategy is planned to provide a roadmap for addressing the housing crisis and boosting construction.

The industry will have high hopes for the strategy, given the Government’s unwavering commitment to its 1.5m new homes target. The Housing Secretary Angela Rayner recently insisted there are ‘no excuses’ for failing to meet this target – although she also acknowledged the scale of the challenge ahead. But Rayner will have a job on her hands to balance ambition with practicality, ensuring that planning reform, funding allocations, and infrastructure improvements align to make large-scale housebuilding viable.

However, a new strategy and planning reform alone won’t be enough to unlock housing delivery, especially with planning permissions at a record low. The sector is also grappling with a shortage of skilled workers, from planning officers in local councils to the construction workers needed to build homes. Without addressing these bottlenecks, progress towards the housing targets could be slowed.

Integrated National Transport Strategy (INTS)

The Government’s new INTS is intended to set out a vision for improving transport connectivity across the UK. Aimed at empowering local leaders to develop transport solutions tailored to their regions, the strategy will focus on streamlining transport planning and boosting infrastructure to support housing and economic growth.

This will be the first national transport strategy in over 25 years, reflecting Labour’s commitment to delivering a more integrated and ‘people-first’ transport system. Expect further devolution of transport powers to local authorities, building on Labour’s push for stronger regional governance.

The Government has already signalled its intentions with the Better Buses Bill, which aims to replicate London’s bus franchising model across the country, and the English Devolution White Paper, which outlines plans to grant more transport decision-making powers to mayors.

It’s not clear what more might come London’s way, given a lot of the focus seems to be on raising the rest of the country to the capital’s level in terms of the Mayor of London’s (via Transport for London) powers.

But one area which will be key to watch is how successfully the Government integrates the transport and housing strategies. London has, for 25 years under the Mayoral system, done a good job of joining up transport, housing and spatial development strategies (in the form of the London Plan) to unlock development and new homes. With the INTS produced by the Department for Transport and the housing strategy written by MHCLG, it will be fascinating to watch whether the Government manages to avoid departments working in silos and achieve a joined-up approach between the two.  Failure to do so could make the Government’s task of building 1.5m new homes a lot harder. 

New Towns

The Government is planning the next generation of new towns, each expected to deliver at least 10,000 homes. Last year, the New Towns Taskforce was established to identify potential sites, with a shortlist set to be published this summer. So far, we’re told that more than 100 locations across England have been put forward for consideration, and the first developments are expected to break ground by 2029.

The ambitious vision is reminiscent of Britain’s postwar housing boom, which led to the New Towns Act 1946 and the creation of 32 new towns, now home to 2.8m people. However, research from the Centre for Cities suggests that the original New Towns programme accounted for just 3.3% of all new housebuilding in the 40 years following the Act – raising doubts about how much impact this new initiative will have. To make a meaningful contribution to the Government’s housing targets, a far greater number of new towns would be needed.

But with construction not set to begin until 2029, the same year the 1.5m homes target is meant to be met, it’s unlikely these new developments will contribute much if anything towards the target. This raises questions as to whether the New Towns plan is actually a distraction from more pressing housing challenges. 

One obstacle the government will face is fierce local opposition, which is only going to grow over coming months. In Tempsford for example, a Bedfordshire village of just 600 people that has been earmarked as a possible site, residents have already raised concerns over compulsory land purchases and flood risks. Ministers will have to be politically brave to push ahead in the face of local resistance.

Spending Review

Usually expected in the Spring, the Spending Review has been pushed back to June 2025 as the Government grapples with difficult public spending decisions at a time when the economy is struggling. This Review will set multi-year budgets for government departments, shaping capital investment in areas including housing, infrastructure, and transport. On the face of it, this should be a key moment for this Government and what they achieve over the lifetime of this parliament.

However, economic challenges have left the Government with a shrinking pot of money to fund large capital projects. The Office for Budget Responsibility recently reported that the Government’s £9.9bn ‘fiscal headroom’ had been wiped out due to low growth, higher than expected interest rates, and rising borrowing costs. Chancellor Rachel Reeves will face tough choices – ensuring spending is both targeted and effective while inevitably leaving some priorities unfunded.

The built environment sector will be watching closely for funding allocations. Key areas of interest include further support for the Affordable Homes Programme, which has already received an additional £500m in October and a further £350m in February, but the expectation is more money will be forthcoming. How much of a share London gets in any bigger pot of money will be one to watch.

Transport funding will also be a major point of discussion, with Transport for London having submitted a ‘wish list’ of priority projects requiring Government support, including new Bakerloo line trains, DLR and Bakerloo extensions, and signalling upgrades on the Piccadilly line. Will this Government, like the previous one, find spending billions of public money in London politically difficult? Or, with the desire to drive growth and unlock thousands of new homes, could they be more confident in green lighting big ticket projects in the capital. 

Draft Leasehold and Commonhold Reform Bill

With publication expected in the second half of 2025, this Bill aims to tackle ongoing issues affecting leaseholders. Building upon the previous Conservative government’s’ 2024 Leasehold and Freehold Reform Act, Labour’s proposals are expected to go further in strengthening leaseholder rights. Key reforms are likely to include:

• Enacting all remaining Law Commission recommendations to strengthen leaseholders’ rights to extend their lease, but their freehold, and take over management of their building.
• Modernising commonhold tenure to encourage its wider use.
• Introducing stricter regulation of ground rents and eliminating forfeiture threats.
• Strengthening the rights of freehold homeowners on private or mixed-tenure residential estates.

Leasehold reform has long been a contentious issue. The previous Conservative Government’s attempt at reform ended up being watered down and rushed through Parliament just before the General Election. This left loopholes such as allowing new leasehold houses to be sold under certain conditions. Labour has criticised the Conservatives’ approach, with Housing Minister Matthew Pennycook stating that further changes are needed to address these gaps, which is why the draft Bill has been delayed in order to ensure it is correctly drafted. Upon publication, the draft Bill will undergo a public consultation. But will this Government encounter the same difficulties as the last one, given how complicated and problematic leasehold reform is?

Conclusion

With a bold housing agenda, major funding decisions and legislative reforms on the horizon, 2025 will be a pivotal year for the built environment. However, questions remain over deliverability, as economic constraints may limit funding for large-scale housing and infrastructure projects. As the year unfolds, the industry will be watching closely to see whether Labour can turn its ambitious policy platform into real progress on the ground.