This week Labour announced plans to help local authorities create affordable homes by enabling them to purchase land at a fraction of its potential cost.
With the general election set to take place at the beginning of 2025, the Labour Party have begun outlining plans they have for England should they be successful. One of their pledges is lowering the cost of land for councils to purchase with an aim to building new homes.
The reforms would overhaul how land is valued under the compulsory purchase order (CPO) process, as part of efforts to tackle the UK’s housing shortage. A CPO allows a public authority to buy land without the owner’s consent to make way for major infrastructure projects or housing developments.
Currently, the landowner is entitled to compensation, but under Labour’s plans the amount would not reflect ‘hope value’ – a premium accrued through the expectation of planning permission being granted for developments in the future.
According to the labour party, an aide told The Guardian, who first reported the story, lowering the cost of land would help to ‘rebalance the power between landowners and local communities’.
A Labour spokesperson said: ‘For too long the Tories have stood aside while speculators have squeezed affordable housing, green spaces and homes for first time buyers.
‘Labour is the only party that will deliver much needed reform to give people secure, affordable and decent housing.’
According to figures from UK Parliament, new housing supply is currently lower than the government’s ambition of creating 300,000 new homes per year. Around 233,000 new homes were supplied in 2021/22.
In addition to those figures displaying that land needs to become accessible to provide much-needed housing, research by the Centre for progressive Policy think tank in 2018 found that land worth £22,520 per hectare as agricultural land could be worth £6.2m per hectare with planning permission: 275 times more.
Shelter, the UK’s leading homelessness charity, claims hope value is effectively calculated by the amount the land could be worth if it was sold to build luxury private homes, and scrapping it would force owners into accepting a fairer price – meaning more affordable homes could be built.
The changes that have been outlined by the labour party are part of the Levelling Up and regeneration bill, which is currently passing through parliament.
Image: Josue Isai Ramos Figueroa