Future Cities Forum November 2025 pre-budget debate

Above: CGI of the consented Sheppard Robson designed development at Block E3 West in Milton Keynes (courtesy Sheppard Robson)

Future Cities Forum held its pre-budget debate this week. The discussion reflected the current situation of a stalling housing market, slowing construction and soaring building costs. Questions were posed on whether the Chancellor Rachel Reeves's potential reform of stamp duty will help or hinder buyer/seller demand and how the Planning and Infrastructure Bill going through Parliament might increase the number of planning consents, currently at a record low.

Contributors included Heather Pugh, Partner at Milton Keynes head-quartered planning firm David Lock Associates, Yolande Barnes, Professor Emeritus at UCL and Director of Yolande Barnes Consulting, Marcus Richards, Partner and public sector financial advisory specialist at EY / Ernst and Young LLP and Nick Ffoulkes, Partner and Head of Residential at Sheppard Robson.

Heather Pugh was asked about the proposed changes to the planning system, and what effect these will have on housing growth, especially for our leading science cities and the Oxford Milton Keynes Cambridge Corridor:

'It's a really interesting time for us from a planning practitioner perspective. We have had lots of promises and announcements from the government, but not a lot of actions around practical solutions and lots of consultations - we know we will have national development management policies coming into play - but there is a lack of joined up planning in the legislation that brings things everything together. We are still working with a plan-led system, and local authorities are being encouraged to progress their plans while taking into account changes within the National Planning Policy Framework and green belt policy.

'There is a recognition that the national development management policies coming in will be non-statutory, but will still be a material consideration. We also have to deal with local government reorganisation which is a challenge for all of us in the industry, as we find ourselves dealing with planning authorities who may not be consenting the new schemes. Then on top of that we have had the New Towns Task Force activity which has promised much but is not progressing in the way we might have hoped. There is general concern with the economy, house building is stalling, and we are trying to do more in an increasingly uncertain world.'

'On the provision of infrastructure, there are some big ticket projects which would unlock a lot of these planning decisions such as East West Rail. Moving forward with that would provide some certainty. There have been arguments on how the trains are operated. Additionally on new towns we are disappointed with lack of action on practical points. There could be a much closer relationship between Treasury and the New Towns Task Force on what the outcomes might be, such as support as well as a development corporation to capture the land value and feed that back into the infrastructure provision.'

Marcus Richards of EY said built on Heather's comments:

'I would emphasize that more than precise details of policy enactment, it's about economic certainty. There is an issue with the way as a nation we have got used to awaiting on Budget announcements, which creates a huge cloud over economic activity and everybody downs tools for two months. We have got to find a way of breaking that cycle of what may or not be a big announcement.

'From a tax perspective I consider there is a need for reform on two fronts. There is a general theme around the need for these big local authority regeneration and housing projects to be able to adopt much greater innovation and this might be a model of tax incremental financing, and the government must be bolder on sticking with its commitments on devolution, not just in a political sense but in a fiscal form as well. Local authorities don't really have the tax raising powers that the government would have you believe now that devolution powers have been granted.

'The other angle is about tax reform that improves the resilience of local authorities. This is on three fronts which includes the fact that council tax does not work as a modern, progressive financing model for local government. That becomes more acute as you ask local authorities to embark on radical and innovative public private partnerships, to enable big regeneration projects, when you have a tax model that was developed in the Victorian era. These two things don't work together. Government needs to be bolder on pushing for tax reform to allow delivery of capital programmes.

'Then there is the general financial crisis in local government where central government is adopting a very regressive stance on dealing with this. It is pushing and forcing local authorities to retrench and sell off their assets. I fundamentally think this is the wrong way. If you compare models internationally - in the USA, in Europe, Australia and so on - where municipal authorities are under duress, they are encouraged to invest in place and in the economy and their balance sheet is the way to achieve financial resilience. Government needs to acknowledge there is a link between its ambitions to achieve major regeneration regionally and locally and the crisis in local government finances.'

Above: Manchester's Victoria North regeneration district with Victoria Riverside towers and the Red Bank development site in foreground (courtesy Manchester City Council and FEC)

Marcus continued:

'Any model you put in place must be very resilient to cope with changes in a programme that might last 10 years, and where there will be radical change. The New Towns programme is an important example in that it had lots of fanfare but because there is no detail this is now creating a problem with a private development sector that needs clarity on time-lines and costs. Government should look to formalise links between different departments to enable capital funding for the inclusion of social and other infrastructure across regeneration developments. On Victoria North in Manchester this has been successful - it happened in an informal way at first and then grew organically. Government wants the New Towns programme to be a collaborative process, so I hope this is made clearer in the Budget.

'Build-To-Rent has been a cornerstone of urban regeneration and government will need to think how it evolves in the future, especially how it might work out of town, in a financially viable way, in suburban locations and also how these developments can incorporate later life care, well-being and later life living as the model matures.'

Public private partnerships need to be much more radical and bottom up in planning terms, said Yolande Barnes:

'What I read in the Planning and infrastructure Bill is very top down and the strength and necessity of the public private partnership model is in getting everyone around the table, and especially the users - ordinary people. There is a failure to recognise that this is the twenty first century not the twentieth, and all the things we took for granted like interest rate levels. These are normal at the moment and we can't wait for a downward yield curve in interest rates. That won't save us.

'What we have now, sluggish growth, is a return to normality. What we had in the late twentieth century around ever-increasing real estate asset prices was abnormal. Underlying all our discussions - whether these are around new towns, new housing and so on - is a fundamental feasibility and viability issue. The viability of sites is just not there in most parts of the country. The financial element is completely ignored in planning discussions. It goes way beyond that as it is also a holistic business model issue.

'Top down planning only talks about the supply side and numbers of units - we do not pay attention to demand. Public-private partnerships should pay more attention to demand. You then realise there is a mismatch between supply and where the demand is. I have a real issue with what we have been building over the last two to three decades, these very large blocks of flats (and as discussed demand will be more diverse across BTR). These are, to misquote Le Corbusier, 'expensive machines for living in'. The cost of occupying these types of properties is significantly higher than simpler types of properties and I would include mansion blocks in that.

'The optimist in me sees demand for mixed use neighbourhoods that look and feel great. If any manufacturer (and I include house builders in that) ignores demand, they risk not achieving the price they want and need on each unit. We have failed to see they are in competition with existing second hand stock. I have looked at the statistics and demographic projections and there will soon be a surplus of second hand stock. Unless new builds start to show beauty, character and amenity in their neighbourhoods, they will fail to achieve the value they need to be viable. We will see a decreasing supply of new homes until developers find a way of realising the potential of a place -we need to discuss place potential rather than place making.

'I did an analysis of a new development recently on land use. I worked out that half the land was left open but this was unused scrub, while of the remaining land 50% was for cars, with wide roads, parking and so on with little or no nature in the development and amenities were off-site. The experience for the residents will be very car based. These parasitic developments are still happening.'

Nick Ffoulkes was asked about the rise in building costs and the potential down-grading of place:

'It's a very challenging environment. Where we work in urban design and architecture within our towns and cities we are cognisant of the time it takes and the complexity. The time it takes to resolve this complexity is at odds with the urgency of providing a resolution. We don't see a rush to the bottom among our successful developer clients in terms of quality. What we do see though is a real wrestle among the design teams to address and find solutions on achieving quality when there is cost pressure on amenities. These might include quality of daylight, the thermal performance of a new building and the cost of heating homes, access to high quality amenities which reflects a diverse community, and the availability of green and outside social spaces, both public and private. These are all inter-linked.

'We have a clear data set now from 2019 to 2020 showing a net deficit of 50,000 new homes built a year. As this grows in aggregate over time it creates more of a gap. We are not pessimistic but we need tangible commitments in the current budget. We need detail and certainty to deliver on the ambition.

As Head of Residential for Sheppard Robson across the UK, Nick was asked whether - we as a nation - are building homes in the right places. He responded:

'We are seeing some green-shoots, for instance in our Glasgow studio, where government commentary on relaxing rent control is having an impact and there are now more feasibility studies in action on developments of 200 to 300 new homes coming back pre-planning. In Manchester we see a stabilised robust BTR market albeit on an urban model, and we seeing single family homes outside regional towns coming back.

'In the education capitals of the UK, in addition to student accommodation, we like to see a mixed-use model develop with, for instance, a hotel alongside co-living with some workspace. The challenge is trying to avoid a mono-culture in order to make the city an interesting place. We need to hold on to a quality threshold for our towns and cities as they evolve which is made up of a rich mix of uses.'

Future Cities Forum would like to thank our contributors for joining this fascinating pre-budget debate.

Above: Whitehall Riverside in Leeds comprises of 500 build to rent apartments across two blocks of 15 and 18 storeys, with commercial space at the ground floor level. The scheme includes over 15,000 sq ft of residents’ amenities set across the ground and first floor, with expansive terrace gardens overlooking the River Aire. The residential building is a key component of the wider masterplan, and will have a transformative impact on this stretch of riverside benefitting residents, visitors and the wider community. Planning for the scheme was approved in December 2022 (Courtesy Sheppard Robson for Glenbrook)

'