The Office for Budget Responsibility has released their latest forecast with praise for NPPF changes
The OBR forecast predicts 0.2% added to GDP by 2029/30, with the highest level of housebuilding in four decades.
The praise is given to the National Planning Policy Framework reforms.
The OBR forecast says that NPPF reforms protect public services
The NPPF reforms are a zero-cost policy change that is said to be the largest that the OBR has handled, and it protects £3.4bn in UK public services.
The OBR forecast predicts that the NPPF reforms will bring housebuilding up to its highest level in 40 years through supporting builders and removing blockers, and delivering an extra 170,000 by 2029/30, or a 30% boost after it hit its lowest in 13 years in 2025/26.
In light of the Plan for Change and the 1.5m new homes target (with a ‘soft target’ of 1.3m announced in the Spring Statement yesterday), this is encouraging news. Further reforms are also expected to help, including the Planning and Infrastructure Bill and the Affordable Homes Programme, will also help beyond what is shown in the OBR forecast.
Due to this, the OBR thinks that the economy will be better off by 0.2% (£6.8bn) in 2029/30, with the possibility to rise to 0.4% in 2034/35.
The largest growth the OBR have ever forecast
The OBR’s supposed growth in GDP is due to:
- Higher productivity in the construction sector, from bringing land on the edges of our largest towns and cities into more productive use, lower planning costs and removing artificial constraints imposed by planning that prevent the construction sector from expanding.
- A greater flow of ‘housing services’ – there will be more houses for the same number of people, allowing new households to form (e.g. people moving out of their parents’ home into a home of their own). This increases GDP through more rent being paid (where new homes are let out) or ‘imputed rents’ (which reflects what owner-occupiers would pay to rent their home on the open market).
- Beyond the five-year forecast, greater housing availability increases labour mobility, which contributes further to growth by allowing people to move to high-productivity places.
The OBR will appraise further reforms as they become official, such as the Planning and Infrastructure Bill, which is currently in discussion in Parliament. The government is also still to deliver a long-term housing strategy, and will announce further housing and infrastructure investments after the conclusion of the Spending Review, following on from the £2bn down payment for affordable and social housing announced yesterday.
The OBR forecast can be read in full on their website.
