City of London Corporation Clears Major Hurdle as Government Backs City Plan 2040

• Housing Minister Matthew Pennycook has officially withdrawn the government's ministerial direction, accepting the Planning Inspectorate's recommendation to back the City of London Corporation’s spatial strategy.
• Provision for at least 1.2 million sq m (approx. 12.9 million sq ft) of additional office pipeline concentrated in designated tall-building growth clusters.

The UK government has cleared the final procedural roadblock for the adoption of City Plan 2040, following an independent examination by the Planning Inspectorate that endorsed the Square Mile’s framework for tall building developments. Housing Minister Matthew Pennycook formally rescinded a ministerial direction that had previously paused the adoption process to re-examine potential heritage impacts on the Tower of London World Heritage Site. The Planning Inspectorate concluded that the City Corporation’s evidence-based approach maintains an appropriate equilibrium between safeguarding historic sightlines and providing space for primary commercial expansion. Crucially, inspectors rejected a competing proposal by Historic England to alter "tall building contours" in the eastern part of the City, confirming that the local planning authority's proposed boundary definitions provide sufficient heritage protection without unnecessarily restricting development capacity.

The decision resolves a prolonged period of planning uncertainty for capital allocators, institutional developers, and commercial occupiers focusing on central London assets. The main commercial beneficiaries are sites situated within designated high-rise zones, particularly the City Cluster in the eastern footprint of the Square Mile. Assets closest to the Tower of London policy buffer now have a firm regulatory foundation which previously carried elevated risk of height reductions or volumetric scaling back due to view corridor objections. With the planning inspectors expected to issue their final report in the coming weeks, the City of London Corporation remains on track to formally adopt City Plan 2040 through internal committees before the end of the year, unlocking predictable planning parameters for the delivery of the 1.2 million square metre office development pipeline.