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The Labour Party’s Pro-Building Agenda

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The Labour Party has pledged that if elected, their pro-building agenda would enable local development authorities in England to purchase land at a lower cost to build more housing. 

This would be covered under new legislation which would allow officials to buy land under compulsory purchase orders without having to factor in a price premium known as the “hope value” needed to secure planning permission. 

Is the Labour Party declaring war on NIMBYs?

Leader of the Labour Party, Keir Starmer, has already been criticised for plans announced earlier this month concerning the easing of development restrictions on green belt land. As part of their pro-building agenda, the party is aiming to rebalance the power between landowners and local communities. This is particularly in light of the drop in homeownership across the country.

The prices of property in the past few decades have soared, as have mortgages leading to more and more people renting as opposed to owning their homes. For example, in 2003, 71% of all homes were owned by the people who live there, but by 2021-22, that had fallen to 64%. The Conservatives have introduced forms of financial aid for first-time buyers, but these provisions are often critiqued as not going far enough and are severely limited.

Under the Government’s levelling up agenda, Michael Gove, Housing Secretary, has promised numerous reforms but these have been shutdown by fierce Conservative backbenchers who oppose building schemes in their constituencies. For example, last year Gove broke his promise concerning the mandatory target of building 300,000 new homes every year and made it voluntary instead. Based on this, local authorities have pushed back their development plans – research by the Home Builders Federation suggests housebuilding in England was set to fall to 120,000 a year, its lowest level since WWII.

Levelling up: housing 

The Labour Party is pledging to back the “builders not the blockers” so has introduced pro-building policies including a return of the 300,000 mandatory target. 

Concerning the removal of hope value from compulsory purchase valuations (CPOs), an analysis by the Centre for Progressive Policy in 2018 found that planning permission inflated the price of agricultural land by 275 times, pushing it up from £22,520 per hectare to £6.2m per hectare.

Politicians from both sides of the Commons parties have declared for years that hope value should be stripped out of compulsory purchase valuations. In 2018 the Tory MP Neil O’Brien called the practice of paying it “highly questionable”, in a report for the centre-right think tank Onward.

O’Brien, who is now a health minister, said “This has made it prohibitively expensive and complex for the old ‘new towns’ model to be viable. And even where government spends taxpayers’ money on major infrastructure projects, the value of this investment is often not discounted when government buys the land for the infrastructure. The system has become unbalanced.”

Gove has implemented some of O’Brien’s reforms as part of the levelling up and regeneration bill currently passing through the House of Lords, but intends to leave it up to the housing secretary at the time to decide whether to eliminate hope value from CPOs on a case-by-case basis. A spokesperson for Gove’s department said “It will ultimately be for the secretary of state to decide whether a compulsory purchase order can be approved and if the removal of hope value is appropriate.”

However, the Labour Party argues that this would leave local planning officials powerless when it comes to buying land for development schemes, as well as leaving the housing secretary vulnerable to strong lobbying from landowners.

Labour officials are currently deliberating the extent of the reforms and whether they should be included in the “take back control” bill, as promised by Starmer, or if they should form a separate planning bill. Additionally, they are considering the most effective way to distribute the benefits generated by planning permission directly to local communities.

Final thought

The Labour Party is moving in the right direction when it comes to establishing policy. Hopefully, their plans for building more homes comes alongside a commitment to levelling up and therefore increasing social housing and implementing more provisions to protect people from rogue landlords.

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