As we approach a new financial year, we look ahead at the upcoming changes to the UK commercial property sector for the remainder of 2025. The past few years have been marked by economic uncertainty, fluctuating interest rates, and ongoing challenges in planning and development. However, there is optimism that by the end of 2025, there will be more stability, with a clearer regulatory framework and renewed focus on housing and infrastructure.
With a new Labour government, the property market could see significant changes. Labour’s commitment to tackling the housing crisis through ambitious targets and planning reform will be a key factor shaping commercial property development in the coming months.
Housing Targets and Planning Reform
A major aspect of Labour’s policy is the introduction of mandatory housing targets for local authorities. The party has committed to an annual target of 370,000 new homes, with a goal of 1.5 million homes by 2029. These targets could have a substantial impact on land use and commercial development, with an increased focus on unlocking sites for residential and mixed-use schemes.
Labour has also said that they will support more compulsory purchase orders (CPOs) and planning reform to speed up the process of getting developments approved. The introduction of these measures could create new opportunities for developers while placing additional obligations on local authorities to meet their housing commitments.
Brownfield First Approach
One of the key planning principles gaining traction is the “brownfield first” approach. The aim is to prioritise the redevelopment of previously used land to reduce pressure on greenfield sites and support sustainable urban regeneration.
While this approach is widely supported, challenges remain. Many brownfield sites come with high remediation costs, planning complexities, and infrastructure constraints. If we see further incentives and funding for brownfield development, this could unlock more land for housing and commercial projects.
Development and Nature Recovery
Another emerging theme in property law and planning policy is the balance between development and nature recovery. The UK government has introduced policies aimed at ensuring new developments contribute to environmental sustainability. This includes biodiversity net gain (BNG) requirements, which mandate that new projects must leave the environment in a better state than before.
While this is a positive step towards sustainable development, it also introduces additional regulatory hurdles for developers. There will likely be a focus on how these policies are implemented in practice and whether they slow down or streamline the planning process.
Challenges and Stability for 2025
Despite the ambitious plans for housebuilding and development reform, there are several barriers that may prevent a rapid increase in new projects:
- Planning system delays – Even with mandatory targets, the UK’s planning system remains slow and under-resourced.
- Funding and viability concerns – Developers need financial support and policy certainty to commit to large-scale projects.
- Supply chain and labour shortages – Construction costs and labour shortages continue to be an issue post-Brexit and post-pandemic.
While we are unlikely to see an immediate surge in new developments, by the end of 2025, we are expecting regulatory clarity and groundwork. If planning reforms are successfully introduced and local authorities receive the support they need, the second half of the decade could see significant growth in commercial and residential development.
Key Developments to Watch out for
Several policy initiatives and regulatory changes will shape the commercial property landscape this year:
- New Towns Taskforce – Recommendations on new town developments are expected by July 2025, potentially influencing large-scale planning and infrastructure projects.
- Future Homes Standard – A new regulatory standard for energy-efficient homes is expected soon and will become mandatory for new builds in England.
- National Planning Policy Framework (NPPF) – Further updates to planning policy are anticipated, which could impact how local authorities implement housing targets.
Conclusion
While the rest of this year is unlikely to bring an immediate boom in development, it could mark a turning point in the UK’s approach to planning and commercial property law. The focus on housing targets, brownfield regeneration, and nature recovery presents both opportunities and challenges for developers.
Much will depend on political stability, economic conditions, and how quickly planning reforms can be implemented. However, if we start to see implemented changes in the coming months, the commercial property sector could see a stronger, more sustainable period of growth in the years ahead.
Disclaimer
This information is intended for general informational purposes only and does not constitute legal advice. We recommend seeking professional advice before taking any action on the information provided. If you would like to discuss your specific circumstances, please feel free to contact us on 0800 2800 421.
