Wednesday, 28 November 2018

Land value – time for reform

Land value – time for reform
In September, I wrote1 about the investigation by and the report from the all-party Housing, Communities and Local Government Select Committee, which I chair, in to Land Values.2 3
I am pleased to say that a wide range of organisations and individuals, across the political and professional spectrum, have also now reflected on the issues and concluded that there has to be significant change in the way in which land is valued and the way in which any uplift in value arising from a change in its planning status is distributed and used. In particular, we want to see a reduction in the cost of land for housing, which could make a significant contribution towards making housing more affordable.
Last weekend, co-ordinated by Onward4 , we5 published an Open Letter which was published in the Sunday Telegraph. It read:
Sharing land value with communities
The root of England’s housing crisis lies in how we buy and sell land. When agricultural land is granted planning permission for housing to be built, the land typically becomes at least 100 times more valuable.
We, the undersigned, believe that more of this huge uplift in value should be captured to provide benefits to the community. If there was more confidence that more of the gains from development would certainly be invested in better places and better landscaping; in attractive green spaces; and in affordable housing and public services like new doctors’ surgeries and schools, then there would be less opposition to new development and much better infrastructure.
The Government should think radically about reforming the way we capture planning gain for the community.
  • First, they should monitor the implementation of their welcome changes to Section 106 to ensure that councils deliver and that developers do not continue to wriggle out of their commitments.
  • Next, they could give local government a stronger role in buying and assembling land for housing, allowing them to plan new developments more effectively, share the benefits for the community and approve developments in places local people accept.
  • Most importantly, they should reform the 1961 Land Compensation Act to clarify that local authorities should be able to compulsorily purchase land at fair market value that does not include prospective planning permission, rather than speculative “hope” value.
Too often in Britain new housing is not good enough and comes without the infrastructure and public services required to support it. Other countries do a better job of making attractive new places to live, by making sure that development profits the community as a whole. Unless we learn from them, Britain’s housing crisis will remain.
Yesterday, it was revealed that there had been another disastrous fall in the number of homes built for social rent last year. Just 6,463 social rent homes were built in England in 2017-18, compared to around 30,000 10 years ago.
Up and down the country, in urban and rural areas, the government’s housing policies have proved disastrous for millions of individuals and families. There is a near unanimous recognition that, for many years to come, we need to build many tens of thousands of new affordable homes to rent and to buy.
In respect of land values, we need to be as bold as the architects of the post-war 1947 Town and Country Planning Act. It is a reform whose time has come.
1 Let’s value our land, 13 September 2018,
2 You can find all the evidence and reports at
3 Land Value Capture
4 Onward
5 A wide range of signatories including Labour MPs Clive Betts, Hilary Benn, Matt Western and Karen Buck; Conservative MPs Tom Tugenhadt, Nick Boles, Scott Mann and Ben Bradley; the directly-elected Labour Mayors of Hackney and Tower Hamlets, and Conservative Mayors of Tees Valley and Peterborough; Conservative Chairs of the County Councils Network and the Local Government Association Housing Board and many others. Organisations supporting included Shelter, Council for the Preservation of Rural England and the Institute for Public Policy Research.