Planning and Infrastructure Bill: Key Takeaways for Property Investors

The government’s new Planning and Infrastructure Bill proposes introducing widespread reforms, some of which will significantly affect property investors, developers, landowners and homeowners. Given the potential impact on the industry, we examine some of the key changes in the bill.

The aim of the Planning and Infrastructure Bill is to accelerate housebuilding, major infrastructure projects and clean energy development across the UK by removing bureaucratic delays and streamlining decision-making processes, thereby enabling the government to meet its target of building 1.5 million homes and 150 major infrastructure projects by the end of this parliament.

Compulsory purchase order reforms 

The bill seeks to make land acquisition more efficient for major developments, allowing local authorities and government bodies to fast-track compulsory purchase orders where land is needed for housing and infrastructure. One of the most notable changes is the removal of ‘hope value’ – the premium landowners often expect for the potential future development value of their land. This could significantly reduce land compensation costs for acquiring authorities, making it cheaper to obtain land for large-scale projects. For landowners, however, this could mean lower payouts when their land is subject to compulsory purchase.

Country Land and Business Association President, Victoria Vyvyan, commented on the proposed reforms: “More affordable housing is desperately needed, but removing hope value from compulsory purchases is tantamount to asking farmers to bear the cost of fixing a housing crisis they didn’t cause.

I very much doubt that the house builders who will be contracted by councils to do the work will be taking a lower profit, so once again farmers will be the only part of the supply chain to lose out.” 

Streamlined planning committees 

The bill also aims to streamline planning decisions by introducing a national scheme of delegation, determining which applications are decided by officers and which must go to planning committees. Additionally, planning committees will be limited in size to ensure efficient decision-making.

John Foster, Chief Policy and Campaigns Officer, CBI, commented: “For too long, businesses have incurred the long delays, permission refusals and burdensome regulations that are intertwined with the planning system. The focus in this Bill on reducing bureaucracy in the NSIP {nationally significant infrastructure projects} regime to ensure faster delivery, represents a significant stride forward in the mission to reform the planning system.”

Local authorities to set their planning fees 

Under the bill, councils will be able to set their own planning fees, which may lead to increased costs for developers and investors, depending on how councils choose to implement their fees.

Energy bill discounts for residents near new electricity infrastructure 

The bill proposes that households living within 500m of new pylons or new electricity transmission infrastructure will receive up to £2,500 off their energy bills over ten years to help mitigate opposition to large-scale energy projects.

Energy and clean power reforms 

For developers involved in energy infrastructure, the bill changes the way grid connections are allocated. Instead of the existing ‘first come, first served’ approach, a new ‘first ready, first connected’ system will prioritise projects that are ready to proceed. This is expected to reduce waiting times for grid connections, which have been a bottleneck for renewable energy developments.

An end to local environmental delays 

Rather than navigating complex site-by-site biodiversity requirements, under the new proposals, developers will contribute to a pooled Nature Restoration Fund that will finance larger-scale environmental projects. This change is expected to reduce delays for developers while ensuring that environmental protections are met. However, the exact cost implications for developers will depend on the contributions required under the new framework.

Development corporations to lead large-scale housing projects 

Under the measures proposed in the Planning and Infrastructure Bill, development corporations (statutory bodies established for the purpose of urban development and regeneration) will have greater powers to plan and deliver large-scale housing projects. These corporations will be tasked with creating new towns and communities, complete with housing, transport links and essential infrastructure. Developers targeting large-scale residential schemes may find new opportunities in areas where development corporations are taking the lead, as the planning and land acquisition process may be more predictable and efficient.

Strategic planning and spatial development strategies

To support growth across multiple local authority areas, the bill proposes introducing Spatial Development Strategies (SDS) that allow regional planning to be coordinated at a higher level. These strategies will be produced by mayors or groups of local authorities who will set out housing and infrastructure priorities across larger regions. This change aims to address cross-boundary planning challenges, ensuring that development aligns with transport and economic needs.

Overall, the Planning and Infrastructure Bill represents a major shift in the planning system to accelerate the delivery of housing and infrastructure. While it presents clear benefits for developers and large-scale investors, landowners and smaller property investors will need to assess how these reforms impact their assets and future investment strategies.

The bill is set for its second reading on 24 March 2025, where its general principles will be debated before it passes through several more stages in its journey to becoming law.