Labour Would Force Landowners To Sell Below Market Value To Boost Housebuilding

Labour would force landowners to sell plots at below market value to boost housebuilding, if the party wins the next general election:

According to The Times:

Lisa Nandy, the shadow levelling-up secretary, is understood to be drawing up plans that would change how land is valued when acquired through compulsory purchase orders (CPOs).

These can be used by councils to acquire land for transport projects, major infrastructure or critically needed homes.

However, landowners subject to a CPO are entitled to a “hope” value, based on the idea that their site may eventually get planning permission.

It means landowners tend to receive prices higher than the value of the land.

The Financial Times reported that if Labour won the election, “hope” value would be scrapped.

Analysis by the Centre for Progressive Policy think tank found that land worth £22,520 per hectare as agricultural land could be worth £6.2 million per hectare with permission: 275 times more.

The Labour scheme appears to go further than government plans, which would allow ministers to direct the purchase of land for affordable homes at its existing value in certain circumstances.

A Labour aide told the newspaper: “We want local areas to capture and benefit from a lot more of the uplift than they currently do when development occurs. We want to tilt the balance of power. It feels like the scales are tilted towards landowners — we want to re-tilt it towards the communities that want to see more houses built.”

Campaigners for affordable housing and the building of new towns have long pushed for strengthened powers for land to be acquired at lower values.

Purchasing land at its agricultural value was behind the success of the new towns programme in the 1940s and 1950s. The move, however, is likely to be opposed by landowners and some developers.

Homes England, the government’s housing agency, was granted powers in 2017 to use CPOs to drive development.

The following year it threatened the first use of its powers to bring forward a delayed 3,000-home development in Oxfordshire.

However, Inside Housing, a trade publication, revealed last week that the agency had never used the powers. Labour’s new policy further draws battle lines for next year’s general election, where Sir Keir Starmer has attempted to pitch his party as backing house-building.

The opposition believes that Conservative infighting over home building will allow it to gain votes from those struggling to get on to the housing ladder. In an interview with The Times this month, Starmer vowed to build more homes on the green belt and promised to back the “builders, not the blockers” by reforming the planning process.

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