The Telegraph

Labour's plan to seize land casts a shadow over the countryside

The Telegraph logo The Telegraph 31.05.2023 09:02:18 Riya Makwana, Ruby Hinchliffe
Labour leader Sir Keir Starmer - Stefan Rousseau/PA Wire

As he sets his sights on winning the key battleground of house building at the next election, Sir Keir Starmer is drawing inspiration from post-war Britain.

As part of Labour's new "pro-building" agenda, local authorities will be given the power to buy land on the cheap for housing development - a move that harks back to policies introduced in the wake of the Second World War.

The Labour leader has already begun to align his party with a "back the builders, not the blockers" stance in a bid to seize on perceived Tory Nimbyism and address the nation's housing crisis. 

He also intends to reinstate annual house building targets of 300,000, and boost home ownership in the UK to 70pc.

Labour's new law would allow local authorities to buy land with compulsory purchase orders at a market discount, with the Government providing the seller with some compensation.

But property experts warn that this is likely to simply push landowners to sell privately for a much healthier sum.

The Labour Party's latest plans have also provoked backlash from the property sector with housebuilders warning they will likely result in even fewer homes being built.

Labour's new law would see owners of land needed for housing development paid a price that excluded the premium associated with potential property development.

Experts say green belt and agricultural land typically goes for up to £20,000 per acre, but land with permission to build houses on it can go for anything up to £3 million per acre.  

A Home Builders Federation spokesman said: "What should be questioned is whether these reforms will result in an increased supply of homes to help address the housing shortage our country faces."

Emily Williams, director at Savills residential research, said: "This idea has come around before, and historically what has happened is that it creates a two-tiered market. 

"People either undersell their land or people privately sell off land at premium prices. If this happens today, we could see developers pull out of building homes and instead invest in different uses like warehouses where the returns would be much stronger."

Britain has used compulsory purchase orders to build homes before. After the Second World War, which saw virtually no new houses built for six years and half a million properties destroyed, the country suddenly needed to build 750,000 homes overnight.

With no time to negotiate and houses in dire need, Britain's post-war Government decided to force landowners to sell their land at agricultural values in the national interest.

In May 1946, post-war 'new towns' were born. The first to crop up included Stevenage, Crawley, and Hemel Hempstead, before the last were built in the late 1960s - including Milton Keynes, Northampton and Peterborough.

Simon Cooper, of land agent Walter Cooper, said: "Back then, it was an emergency. CPOs were mainly used to buy farms and estates. Lots of people had lost their sons, so had no-one to pass their estates onto.

"There was more of a national spirit back then. Veterans would be paid to work on these farms, so it was co-societal."

CPOs were eventually dropped. Ms Williams added: "Part of the reason this didn't work before was because the system became unfair. Some people were still paying full value for land while others were hugely discounted.

"People began to question whether this much government intervention in the private market was fair."

CPOs have been used more recently by the Government to pave the way for the controversial HS2, the high-speed railway plotted from London to Manchester.

Those served with a CPO can file an injunction against it, but this can take years. Mr Cooper cited one example in Hertford which took three years.

Experts argue that Labour's plans do not address the main reasons for housing shortages - the onerous planning system and Nimbyism.

While Sir Keir has pledged to bring back housing targets, experts say his CPO plans will not help relieve planning backlogs.

The number of new homes that completed in the first quarter of the year was 20 per cent lower than in the last quarter of 2022.

Housebuilders have accused ministers and "Nimby backbenchers" of failing to tackle barriers to development, saying that red tape and hold-ups in the system were preventing millions of people from getting on the ladder.

Mr Cooper said: "The issue is people can't get planning permission, not that they don't want to develop their land. It doesn't seem to make much sense.

"Local planning departments are overworked and underpaid, with jobs available for upwards of three years. Some outsource to Australia.

"We need to ring fence planning department fees and run the departments like viable businesses. Right now, you've got planners dealing with local plans for a new porch at the same time as plans for a 700-unit new settlement."

The Government has proposed to raise planning fees by up to 35pc to help fund departments, but this would still leave a £225 million shortfall in processing costs.

In the meantime, wait times on securing planning permission are at an all-time high.

Across Europe, countries already use similar orders to force landowners to sell. In Germany, the state buys land at use (or agricultural) value, then re-sells it to developers telling them what they can build on it.

There are different compensation options for landowners in Germany depending on who they are. Any compensation is based on an assessment that considers how much money the land owner is losing for not selling at a premium.

The Labour Party intends to align the UK with its European counterparts. 

But Stefania Fiorentino, a teaching associate at the University of Cambridge's land economy department, warned that the UK's planning system was much too different for it to work in the same way.

In Germany and other European countries, developers buying land already know what they can build on it. Unlike the UK, where it is up to developers to seek planning permission after they buy it.

Dr Fiorentino said the UK has a "more discretionary" approach to planning compared to its European neighbours.

She said: "In Germany, the Netherlands and France, they have zoning plans which exist before building permits are secured. This means development rights are embedded in the land.

"The public sector buys the land, plans the infrastructure and then re-sells to the developer telling them what they can build. This is how they capture increasing value.

"In the UK, it is up to the developers to get planning applications. So the 'hope value' is a result of the planning permission."

There are also concerns that the re-introduction of CPOs could open up local authorities to corruption. 

Mr Cooper said it could allow local authorities to reject planning applications submitted by landowners, buy the land at a discount using a CPO, approve the planning application themselves and develop it.

He said: "If planning systems were reformed, developers would be developing on these spaces already. This will just allow local authorities to buy it, then appoint their own consultants and a property 'devco' - which are owned to a degree by local authorities."

A Labour spokesman said: "For too long the Tories have stood aside while speculators have squeezed affordable housing, green spaces and homes for first time buyers."

Sign up to the Front Page newsletter for free: Your essential guide to the day's agenda from The Telegraph - direct to your inbox seven days a week.

mercredi 31 mai 2023 12:02:18 Categories: The Telegraph

ShareButton
ShareButton
ShareButton
  • RSS

Suomi sisu kantaa
NorpaNet Beta 1.1.0.18818 - Firebird 5.0 LI-V6.3.2.1497

TetraSys Oy.

TetraSys Oy.