May to Use Land Value Capture to Build New Generation of Council Homes

Sunday Times – Greater Ability to use CPO was included in the Taylor amendment to the Neighbourhood Planning Act – given royal assent just before purchase.  It would be little use however unless the Aquisition of Land Act and the land compensation code was amended to ensure the ‘alliterative scheme’ was at existing use value.  Tellingly there is nothing on value capture in the leaked Labour manifesto.  Over time such a scheme could create a rolling fund effectively paying for itself through reduced housing benefit.  The really radical approach would be to follow the IPPR approach of decentralising housing benefit and letting LAs capitalise future savings to build homes.  If adopted Healy would have nothing to say in terms of how labour would build more homes.

Theresa May will launch an audacious bid to woo Labour voters when she puts plans for a new generation of council homes for the working classes at the heart of her programme for government.

In an interview with The Sunday Times, the prime minister said she will change the law to help councils and housing associations build hundreds of thousands of homes, ending years of neglect of social housing.

May will also seek to emulate Margaret Thatcher’s dream of a “property owning democracy” in the 1980s, by ensuring a proportion of the new homes will have to be offered for sale to tenants after 10 to 15 years under the Right to Buy scheme.

The plan to adapt Thatcher’s most popular policy to help “Generation Rent” will form the centrepiece of the Conservative election manifesto, due to be published on Thursday.

It is designed to help about 1.2m families who are currently on local authority waiting lists for a social tenancy. There are 300,000 fewer homes for social rent now than 20 years ago.

May said: “Whether you rent or buy, everyone needs the security of a place to call home but too many ordinary working families are stuck on council waiting lists, facing unaffordable rents and struggling to save for that first deposit.

“That’s why we will fix the broken housing market and support local authorities and housing associations to build a new generation of council homes right across the country.

“Giving tenants a new right to buy these homes when they go on the market will help thousands of people get on the first rung of the housing ladder, and fixed terms will make sure money is reinvested so we have a constant supply of new homes for social rent.”

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In the 1960s and 1970s, councils built more than 1m homes a decade but now build just a few hundred homes a year.

Under the new plans, the government will offer councils some money, help them borrow more and change the laws governing compulsory purchase orders to make it cheaper for councils to buy up derelict buildings and pockets of abandoned brownfield land on which to build the homes.

May will tear up current rules that mean councils must purchase land at “market value”, which includes the price with planning permission irrespective of whether it has been granted or not. That means local authorities very rarely use their compulsory purchase powers for social housing, leaving derelict buildings in town centres.

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2 thoughts on “May to Use Land Value Capture to Build New Generation of Council Homes

  1. Will the new CPO powers apply with a broad sweep? By this, I mean, will a LPA be able to buy literally any land it chooses? For example, with the north Essex garden communities project there are three broad search areas. If the LPA’s create a new town corporation under the new Bill, will they be able to force land owners to sell land at agricultural value? And what will this mean where there have already been negotiations with land-owners at a higher value, thought to be round £100k per acre?

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