The government has rowed back on proposals to require all residential projects on grey belt sites to deliver 50% affordable housing as it published the final version of its long-awaited revisions to national planning policy.

In a significant victory for the development sector, the government said that it would instead require speculative applications approved on the newly defined “grey belt” sites on former green belt land to deliver 15% more affordable homes than in the local housing policy – up to a cap of 50%.

The change in tack came as the government set out its finalised plans to speed up the planning system in an effort to reach its target of building 1.5 million homes during the course of this parliament.

The publication of the formal response to its National Planning Policy Framework consultation at noon today also revealed the extent of the opposition to most of its pro-housing measures – with ministers pushing ahead despite the majority of respondents opposing much of the reform package.

>> Also read: Angela Rayner: a secretary of state on a mission but has she won over the industry?

The change to the previously proposed “golden rules” will apply to applications seeking to build on so-called “grey belt” land – sites in the green belt which do little to contribute to the green belt’s “core purposes”, which relate to keeping the countryside open.

The government had said that all sites would have to deliver at least 50% affordable homes or be subject to a viability test on the basis of a stringent benchmark land value which housebuilders had argued would make many, if not most, green belt sites unviable.

The Home Builders Federation (HBF) and the Land, Planning and Development Federation (LPDF) had both lobbied to replace the 50% flat rate for affordable housing on grey belt sites – promised by Labour as a condition for releasing green belt land prior to the election – to be replaced with a 10% affordable housing premium on local policies.

The government’s change instead requires developers to deliver a 15% premium above local policies. It also states that, at the point at which local authorities have new plans in place, the government will let those authorities set the affordability requirement on grey blt sites themselves.

The changes to the National Planning Policy Framework (NPPF), published in draft form in July, confirmed increases in housing targets, which will once again be mandatory, with local councils now expected to demonstrate how they will meet a combined annual target of 370,000 homes. The previous housing targets, which were advisory, had a combined total of just 305,000.

Under the finalised NPPF, areas with the highest unaffordability and greatest potential for growth will see targets increase, according to the government, while stronger action is planned to ensure councils adopt new plans.

The target has increased by 7,300 in London, compared to the summer, and has also risen slightly in the South-east and East of England regions. The target has fallen in all other areas compared to the consulted version, with the biggest drop in Yorkshire and the Humber.

The NPPF will also require councils to review greenbelt boundaries to meet their targets, by identifying lower quality land, on which development will be subject to a set of requirements related to infrastructure and affordable housing provision.

Housing secretary Angela Rayner has promised to deliver “the biggest boost in social and affordable housebuilding in a generation” 

In a statement this morning, housing secretary Angela Rayner said: “Today’s landmark overhaul will sweep away last year’s damaging changes and shake up a broken planning system which caves into the blockers and obstructs the builders.

“I will not hesitate to do what it takes to build 1.5 million new homes over five years and deliver the biggest boost in social and affordable housebuilding in a generation.”

The final version of the NPPF came after a consultation which saw more than 10,000 responses.

The draft NPPF was widely supported across the industry, though there were nevertheless calls for greater support for small and medium-sized businesses, as well as clearer and more precise language to ensure the NPPF is easily interpreted in planning decisions.

However, a number of local authorities have come out against Labour’s attempt to increase targets for their areas, suggesting they are being “set up to fail”.

Addressing the House of Commons in a ministerial statement today, housing minister Matthew Pennycook, said: “The views shared with us have been invaluable in helping refine our initial proposals so that we are able to introduce an effective package of reforms today.”

He said there were four areas of significant change to their initial proposals:

Housing targets

Pennycook told MPs: “We fully intend to maintain the level of ambition outlined in July, but we heard through the consultation a clear view that we should do more to target housing growth on those places where affordability pressures are most acute.

“We have therefore made the method more responsive to demand, redistributing housing targets towards those places where housing is least affordable, while maintaining the overall target envelope.”

Grey belt definition

“This approach received broad support through the consultation, but a strong desire was expressed to limit the room for subjectivity. We have therefore set out a clearer description of how to assess where the land meets the definition of grey belt and we will be providing further guidance to local authorities in the new year.”

Housingminister Matthew Pennycook said the final plans showed the government had listened to the consultation 

The proposals had come in for criticism from witnesses at the House of Lords built environment committee’s short inquiry into the matter. It had been suggested that the definition of grey belt lacked clarity and would lead to ‘confusion’ among planners and a surge in legal challenges.

Golden rules

Golden rules proposed a flat 50% affordable housing target with limited use of viability assessments to adjust this. Pennycook said: “Through the consultation, we have recognised that this approach risked uncertainty.

“Rather than a single 50% target, we are introducing a 15 percentage point premium on top of targets set in local plans up to a maximum of 50%. And because that means the target itself will be responsive to local circumstances, we will be restricting the ability for site-specific viability assessments until such time as we have amended viability guidance in the spring of next year.”

Presumption in favour and transition

Pennycook also announced changes to ensure that, where the presumption in favour of sustainable development applies, it will be consistent with “the clear requirements in national policy relating to sustainability, density design and the provision of affordable homes”.

He said the government was also softening transitional arrangements for local authorities at an advanced stage of planmaking.

Local authorities will be given two more months to progress their plans. The transitional arrangement will apply where the draft housing requirement in the plan meets at least 80% of local housing need, rather than numerical 200 homes threshold originally proposed.