Legal Developments in Construction and Planning: A November 2025 Update
November 2025 sees significant developments unfolding in both planning and construction law, poised to impact housebuilding, infrastructure projects, and contractual practices within the sector.
Planning & Infrastructure Bill Progress
the government’s ambition to deliver 1.5 million new homes during the current Parliament hinges on reforms to the planning process. Key changes to the draft Planning and Infrastructure Bill are currently being finalized ahead of expected approval in November 2025,having been announced late in its passage through the House of Lords. These proposed alterations focus on accelerating development in housing, clean energy, and water security.
Specifically, the bill includes provisions for:
* Ministerial Oversight: Granting Ministers the right to block Local Authority rejections of planning applications, alongside potential use of call-in powers for central review.
* Reservoir Development: Streamlining approvals for large reservoirs, including allowing applications from companies outside the water sector.
* Judicial Review Timelines: Preventing planning permissions from expiring due to protracted judicial reviews.
* Onshore Wind Capacity: Facilitating the approval of onshore windfarms, aiming to secure an additional 3GW of capacity.
* Natural England’s Role: Adjusting the role and responsibilities of Natural England to allow greater focus on complex applications.
Further details on the bill are available via the government’s resources: Pro-growth package unshackling Britain to get building – GOV.UK and Guide to the Planning and Infrastructure Bill – GOV.UK.
Late Payments & Construction Retentions Consultation
Parallel to the planning reforms,the Department of Business & Trade (DBT) concluded a consultation on late payments in the UK economy at the end of October 2025. This consultation addresses a long-standing issue, notably prevalent in the construction sector, and builds upon previous legislative changes implemented through the construction act.
Two proposals within the consultation specifically target retentions in construction contracts:
- Potential Ban on Retention Clauses: A proposal to prohibit the use of retention clauses altogether,preventing employers from deducting a percentage of sums due until works are completed and defects rectified.
- Retention Fund Protection: Introducing requirements to safeguard retention funds from insolvency and ensure timely payment, potentially including segregation into separate bank accounts, accrual of interest for the payee, and automatic release unless justified notification is provided.
Implementing these changes would likely necessitate amendments to the Construction Act. While contractors may welcome these proposals, developers and funders who rely on retentions as security and performance incentives may express concerns. The second proposal, even if implemented, could introduce additional administrative and cost burdens to construction contracts.
The DBT anticipates publishing the consultation outcome within 12 weeks, around mid-January 2026, at which point the specific legislative changes will become clearer.Details of the consultation can be found here: Late payments consultation: tackling poor payment practices - GOV.UK.
