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

Last year saw a huge shift in UK politics, the Conservatives’ 14 years in government ended, with the party left with their lowest-ever number of seats at a general election (121) since the party was formed in 1834.

Labour swept into power, promising ‘Change’ and a complete overhaul of how the country is run. With a promise to get Britain building, the role of the built environment is a critical area of focus for the new Government. It’s fair to say that some of Labour’s proposals are particularly promising, even if in practice many in our sector suspect it will be difficult for them to deliver.

Take their eye-catching pledge to build 1.5 million new homes over this Parliament – even the Prime Minister himself conceding it’s ‘too ambitious’. Yet, one thing is clear – the scale of the ambition reflects the Government’s recognition of the urgent need for more homes amidst a growing housing crisis.

The Labour Government’s first months in office haven’t been without challenges, and they didn’t experience much of a ‘honeymoon period’. Nonetheless, they hit the ground running with a flurry of built environment related announcements in the latter half of 2024 including:

• A revised National Planning Policy Framework (NPPF) and proposals for the reform of planning committees.
• A New Towns Taskforce, tasked with identifying potential sites by July 2025.
• A Remediation Action Plan to speed up addressing critical building safety issues in residential buildings.
• A £500m boost to the Affordable Homes Programme.
• Making full use of the Government’s ability to intervene in planning decisions (which, it’s fair to say, they’ve certainly done).

As we enter 2025, the Government looks likely to push full steam ahead on its ambitious agenda. Three key built environment related Bills are likely to dominate the coming months, which are covered in more detail below:

Renters’ Rights Bill

Introduced in September 2024, the Renters’ Rights Bill had its third reading in the House of Commons last week and is scheduled to have its second reading in the House of Lords on 4 February. It seeks to overhaul the private rental sector by providing renters with greater security and stability through measures such as:

• Abolishing Section 21 ‘no fault’ evictions.
• Replacing fixed term assured tenancies with rolling tenancies.
• Limiting rent increases to once per year and to a ‘market rate’, with provisions for tenants to challenge increases.
• Banning rental bidding wars.
• Improving rental property conditions.
• Establishing an Ombudsman for the rental sector, alongside stronger enforcement powers for local authorities.

The previous Conservative Government trumpeted their commitment to reform the rental market, but ultimately, they fell short with the legislation first watered down (under pressure from their own backbenchers) and then later abandoned when the General Election was called. Labour have been quick off the mark, championing this as finishing the job the Tories started but failed to see through. It’s clear that the legislation has the potential to radically reshape the sector, although concerns remain, particularly over the impact on the financing model for the build-to-rent sector.

Great British Energy Bill

Currently in the House of Lords, having already passed through the House of Commons, this Bill will establish Great British Energy as a publicly owned company to:

• Boost clean energy production, distribution, and storage.
• Improve energy efficiency and resilience.
• Support the UK’s goal of achieving 95% clean energy by 2030, as outlined in Labour’s Clean Power 2030 document.

Labour’s emphasis on renewable energy and the clean energy transition is intended to position the UK as a leader in global climate action. It was recently reported that UK electricity generation in 2024 was the cleanest in history, with fossil-fuels accounting for just 29% of electricity generation. Labour’s ambitions are to go even further, and to improve the UK’s longer term energy security so we are less reliant on foreign energy imports.

Planning and Infrastructure Bill

Expected at some point in the coming months, we’re yet to see the exact details of what the Government is proposing. So far, what we do know is that the bill is expected to include:

• Establishing a National Infrastructure and Service Transformation Agency to implement a 10-year infrastructure strategy. The Infrastructure Strategy is expected to be published in the Spring and focus on economic growth, strategic clarity, and private sector collaboration.
• Streamlining the Nationally Significant Infrastructure Projects (NSIP) regime, including simplifying the consenting process for these projects. It has already been announced that onshore wind farm projects larger than 100MW will be brought back into the NSIP regime.
• Accelerating upgrades to the national grid and expanding renewable energy capacity.
• Reforming planning committees by delegating certain decisions to planning officers, proposing dedicated committees for strategic development, and requiring training for all planning committee members.
• Establishing a Nature Restoration Fund to help developers meet environmental obligations while expediting stalled housing projects that have resulted from nutrient neutrality rules.

If Labour is to get anywhere near their target of delivering 1.5m homes over this Parliament, then the ambition of this bill feels critical.

Analysis

Labour’s large majority in Parliament should see these Bills progress swiftly. Both the Renters’ Rights Bill and the Great British Energy Bill are already advancing at pace, and once introduced, the Planning and Infrastructure Bill is likely to follow suit.

The bills may see significant opposition from the Conservatives. The Renters’ Rights Bill revisits legislation which led to 50 Conservative MPs, many of whom were landlords, expressing opposition to the then Government’s proposals. Meanwhile, the Great British Energy Bill has already been opposed by Conservative MPs, with many citing the plan as unfunded and sceptical as to whether it will reduce household energy bills.

It will be particularly interesting to see how the Planning and Infrastructure Bill fares once published. Former Conservative Cabinet Minister Simon Clarke expressed support for Labour’s planning reforms last year and urged colleagues to support them too, which suggests there may be some cross-party agreement. However, NIMBYism remains a challenge among Tory backbenchers, as it was before the last election (leading to the collapse of previous planning reforms) with some newly elected Tory MPs having already launched campaigns to block energy infrastructure and solar farms in their constituencies.

Conclusion

Labour’s ambitious built environment agenda presents both opportunities and challenges. The sheer scale of their pledges raises questions about their deliverability with the 1.5m homes target the source of much scepticism. To get anywhere close to delivering on their ambitions, it will desperately need the combination of planning reforms, infrastructure investments, and regulatory reform.