Land value reforms among Labour plans to tackle housing crisis

Labour would overhaul how land is valued under the compulsory purchase order process as part of efforts to tackle housing shortages.

Under such orders, local authorities can effectively force property owners to sell to make way for major projects or housing developments.

The Financial Times reports that shadow levelling up secretary Lisa Nandy would bring forward legislation to allow councils to purchase land at a price that does not reflect the “hope value” – the value accrued through the expectation of planning permission in the future.

Labour argues that the proposal would not see the state paying below market value.

Michael Gove

Rather the proposal would see the policy constraints taken into consideration in the same way that current rules, including the application of “hope value”, impact market price.

Officials believes such an approach would bring England in line with arrangements in Germany, France and the Netherlands.

Housing supply is likely to dominate the months leading up to the next general election.

The Prime Minister was forced early in his premiership to drop plans for mandatory local housing targets as part of a plan to build 300,000 homes a year in response to a revolt by Tory MPs and activists.

But Mr Sunak remains under pressure to get Britain building in order to increase the supply of homes to alleviate soaring rents and shortages.

Earlier this month, Housing Secretary Michael Gove admitted the challenges facing those who want to own a home.

“There is a problem and the problem is there simply aren’t enough homes in this country,” he said.

“It is increasingly difficult to get on the property ladder.”