Housebuilding in the UK is expected to reach its highest level in four decades, with planning reforms projected to add £6.8bn to the economy, according to the Office for Budget Responsibility (OBR).

The independent financial watchdog credits policies such as mandatory housing targets for local councils and relaxed restrictions on green belt development for the anticipated construction of 1.3 million new homes by 2030. Government officials have pledged that further reforms and increased investment in affordable housing will help deliver their ambition of 1.5 million new homes in England over the next five years.

However, the OBR cautioned that these forecasts are subject to uncertainties, including a potential shortfall in skilled construction workers. Industry leaders warn that tens of thousands of new recruits are needed to meet demand, as the sector grapples with an ageing workforce and persistent skills shortages. In response, the government has allocated £600m to train up to 60,000 additional construction professionals.

Despite optimism around the reforms, concerns remain over local resistance, with critics arguing that the new rules could override community interests. Some councils insist the increased housing targets will be difficult to meet due to land shortages and strained infrastructure.

The Home Builders Federation welcomed the changes as a "positive step" but stressed the need for further support for homebuyers. Executive Director Steve Turner highlighted rising costs, new taxes, and regulatory fees as barriers to investment in new homes.

A key point of interest was whether the OBR would factor the government’s planning reforms into its economic forecasts. Chancellor Rachel Reeves confirmed in her Spring Statement that the OBR had indeed incorporated changes to the National Planning Policy Framework, published in December. According to the watchdog, these adjustments will drive an additional 170,000 homes over the next five years, raising the total forecast to 1.3 million by 2029/30—an increase of 16%. Annual construction rates are expected to peak at 305,000 homes, the highest in 40 years.

The OBR estimated that the resulting surge in housebuilding will expand the UK economy by 0.2% by 2030, marking the largest positive impact on growth from a "zero-cost policy" it has ever projected. This economic boost will stem from higher productivity in construction, increased rental income, and greater workforce mobility.

While the increased supply of homes is expected to marginally lower house prices—by approximately 0.9% by 2029/30—experts argue that first-time buyers remain in need of greater support. Felicity Barnett of the Mortgage Advice Bureau noted that many aspiring homeowners are "trapped by strict affordability criteria," limiting their access to the property market. Investec analyst Aynsley Lammin added that beyond planning reforms, a strong economic backdrop, competitive interest rates, and targeted policies for first-time buyers are essential to stimulating demand.

Under the revised planning framework, priority will be given to redeveloping brownfield sites. However, ministers acknowledge that this alone will not meet the government’s ambitious housing targets. As a result, local councils will be required to reassess green belt boundaries, identifying lower-quality "grey belt" land suitable for development. High-quality green belt land may also be repurposed, provided developers commit to infrastructure improvements, affordable housing, and accessible green spaces.