Mayoral Call-In Powers Speed Up Building as Construction Insurers Pull Back

What the Mayoral Call-In Powers Change for English Planning

The UK government is preparing to give mayors in 13 English combined authority areas the power to take over major planning decisions from local councils. The change will cover housing schemes of more than 150 homes, commercial developments above 15,000 square metres and buildings taller than 30 metres, and is intended to accelerate Labour's target of 1.5 million new homes by the end of the decade.

Mayors in Greater Manchester, Liverpool City Region, the West Midlands and the West of England would gain call-in powers similar to those already used by London's mayor. Housing minister Matthew Pennycook has pointed to the London system as proof that mayoral intervention can unlock stalled strategic sites. The reform is disputed: the Conservatives, Liberal Democrats and Greens argue it weakens local democratic accountability, while Cambridgeshire and Peterborough's Conservative mayor Paul Bristow says it would let him approve schemes that have been delayed.

The planning change has immediate implications for construction insurance. Insurers writing building and latent-defects risk are already pulling back after a rise in defective workmanship claims, and several have stopped writing construction business altogether or raised deductibles to as much as £150,000. A faster pipeline of approvals does not by itself add skilled labour, site inspection capacity or more cautious contractor behaviour.

The timing is complicated by the Building Safety Act 2022, which extended the limitation period for claims under the Defective Premises Act from six years to 15 years from practical completion and made a 15-year new-build warranty mandatory, up from the 10-year Buildmark cover traditionally provided by NHBC. For developments approved through the new fast-track route, any defects will carry that longer tail.

Why Faster Approvals Are Colliding With a Construction Insurance Pullback

The Planning Reform Adds Volume, Not Inspection Capacity

The government's intervention is designed to remove blockages, but the construction insurance market is restrained by structural problems: defective workmanship claims, tight margins and aggressive contractor behaviour in a competitive building environment. Accelerating approvals without more skilled labour and independent site inspection could simply move more schemes into a pipeline that insurers are already treating with scepticism.

This is why the insurance response has been driven by risk, not volume. Some underwriters have exited construction risks entirely, while others have raised deductibles to £150,000. If mayoral call-in increases the number of schemes breaking ground, the same inspection shortfall is likely to appear later as higher claims frequency in structural warranty and latent defects lines.

A 15-Year Liability Tail Is Now the Underwriting Baseline

Under the Building Safety Act 2022, claims under the Defective Premises Act can be brought up to 15 years from practical completion, compared with six years before the change, and developers must provide a new-build warranty of at least 15 years rather than the 10-year NHBC Buildmark norm. That means developments moving through the accelerated planning route now carry materially longer exposure than projects approved a few years ago.

For underwriters, the key variable in latent-defects cover is not their own site visibility but the reliability of third-party inspections. A current dispute between AmTrust Europe and MD Insurance Services illustrates the point: AmTrust alleges that MD's inspection subsidiaries failed to assess construction risk properly before latent-defects policies were written on developments that later showed serious structural defects. The episode shows how long after the original underwriting decision the consequences can emerge.

Call-In Powers Raise Professional Indemnity Exposure

More schemes being overridden at mayoral level is also likely to mean more judicial review challenges and legal disputes around major developments, because call-in powers are explicitly designed to override local decisions. Professional indemnity policies written for architects, planning consultants and local authority planning officers before call-in powers became routine in this wider group of regions may not fully price that exposure.

Checks for Brokers, Developers and Planning Advisers Before the Pipeline Accelerates

For brokers, developers and planning advisers, the practical task is to align existing cover with the new statutory and planning environment before the development pipeline accelerates.

• Housebuilders and developers should check that structural warranty and latent defects policies reflect the 15-year limitation period that has applied since 28 June 2022 and the Building Safety Act's 15-year warranty requirement, rather than older 10-year NHBC-style terms.
• Brokers should review client placement documentation to confirm that inspection conditions and liability periods match the new statutory tail for each scheme entering the mayoral call-in route.
• Architects, planning consultants and local authority planning officers need to test professional indemnity wordings for cover against judicial review challenges flowing from mayoral call-in decisions; wording written before those powers were used regionally may under-price the risk.
• Combined authorities and mayors should require clear inspection and warranty arrangements at approval stage, because the private insurance market has already responded with exits from construction risk and deductibles as high as £150,000; volume without inspection capacity may simply defer defect claims.