The government has bought in a previously announced plan to help councils buy land and develop new homes.
The scheme is designed to help councils buy land for development via compulsory purchase orders (CPOs) without paying ‘hope value’ costs.
Hope value refers to the potential value of the land, i.e. the difference between the amount it is worth when bought and the amount it will be worth when developers build their planned projects.
This hope value means that councils are often forced to pay thousands more to buy land for housing.
The new scheme will make it “cheaper and easier for councils to transform communities by building new homes,” according to the Government.
“Our changes will act as a catalyst for investment in our towns and cities and drive much-needed regeneration in communities across the country,” Levelling Up Minister Jacob Young said.
However, the scheme may not be as useful as it seems.
Lawrence Turner, Director of Boyer planning consultancy, said: “This may seem beneficial at first glance – giving local authorities the ability to overcome financial and viability barriers to delivering housing.
“But my concern is that it will be ineffective and time-consuming – CPO is a lengthy and costly process, and many local authorities will lack the resources to [carry it out].”
Boyer continued: “The CPO process frequently involves negotiations with multiple landowners, legal challenges, and delays. Landowners may choose to challenge the decision through judicial review, further prolonging the process. As such, it is far from the quick and efficient means of unlocking land for new development which is needed.”
The CPO process can take between 12 and 18 months.
“Even if effective, CPOs are just one piece of the puzzle when it comes to delivering new homes.
“The wider planning system in the UK is excruciatingly slow and bureaucratic, with Local Plans and planning applications often taking years to complete and the intrinsic problems that have led to this situation must also be addressed,” Boyer said.
The government has estimated that we need 300,000 new homes per year. 231,100 new homes were built in 2023, according to Savills.
“We need to see a more holistic approach to addressing the housing crisis: including reforming the planning system and providing support to councils, reviewing the Green Belt and delivering new homes in sustainable brown and greenfield locations will be necessary to truly make a meaningful impact on the availability of affordable housing in the UK,” Boyer said.
“Enabling local councils to buy cheaper land through Compulsory Purchase Orders without paying ‘hope value’ will allow them to build more of the desperately needed affordable homes the country needs, in the right places for the people who need it most,” Kate Henderson, Chief Executive of the National Housing Federation, said.
“To solve the housing crisis and unlock the land needed for these homes, these changes must sit alongside wider reforms to planning policy which should form part of a nationally coordinated fully funded long-term plan for housing,” Henderson said.