Labour vows to force landowners to sell at lower prices to tackle housing crisis
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Labour vows to force landowners to sell at lower prices to...

Lisa Nandy would introduce the new law if Labour win the general election (Picture: PA / Getty)

Labour has vowed to arm-twist landowners into selling at a lower price to ease the ongoing housing crisis.

Britain doesn’t have enough houses – and what is there isn’t always affordable or roomy, leading to a backlog and an increase in homelessness, campaigners say.

Lisa Nandy, shadow levelling-up secretary, hopes to reform how land is priced and purchased by English councils through ‘compulsory purchase orders’ (CPO).

Labour officials told the Financial Times the opposition party would introduce the new policy if they win the next general election.

Currently, councils and public bodies can buy plots from landowners through a CPO if the land is deemed vital for building homes or critical infrastructure.

But leaseholders can crank up the price tag on the land by factoring in the ‘hope price’ – the additional worth the land would gain from any redevelopments.

Homelessness charities say that there simply aren’t enough houses to keep up with spiralling demand (Picture: Getty Images)

The gap between the two values can be in the millions, according to the Centre for Progressive Policy think-tank.

At its agricultural value, land worth is on average £22,520 per hectare – at its hope value, it costs 275 times more at £6,200,000.

Labour’s plan would rewrite the Land Compensation Act 1961, which prevents councils from buying land at its existing use value.

The party stressed that this would not see the local authority or public body pay below market value.

Labour believes would bring England in line with similar arrangements in Germany, France and the Netherlands.

According to one estimate commissioned by the National Housing Federation (NHF) and Crisis, 340,000 new homes (of which 145,000 should be affordable) need to be built in England each year.

Rishi Sunak dropped a 2019 manifesto pledge to build 300,000 new homes a year by the mid-2020s (Picture: AFP)

This is higher than the Tory government’s since-scrapped manifesto target of 300,000 new homes a year by the ‘mid-2020s’, which it for years failed to reach, according to official figures.

Prime Minister Rishi Sunak dropped the 2019 home-building pledge in response to a revolt from Conservative MPs and councillors representing more well-heeled southern constituencies.

‘What I heard consistently, particularly from our councillors and our members, was what they didn’t want was a nationally-imposed top-down set of targets telling them what to do,’ Sunak told ConservativeHome in April.

Earlier this month, housing secretary Michael Gove admitted hopeful home-owners may struggle to buy.

‘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.’

The shadow housing secretary would reform how plots of land acquired in England through compulsory purchase orders are valued (Picture: Gary Roberts Photography/Shutterstock)

And the problems people face are numerous. Crisis, a homelessness charity, says that supply simply can’t keep up with demand.

Nor can people keep up with the price amid the cost-of-living crisis. Average UK house prices rose by 4.3% in the 12 months to March this year, bringing it to an eye-watering £285,000; £11,000 higher than last year, per the Office for National Statistics (ONS).

Social housing vital for people on lower incomes or welfare, meanwhile, has plummeted for years, with the number of socially rented homes down by about 240,000 from 2012 to 2020.

The housing crisis has resulted in one in nearly five households having an adult child living with their parents or guardian, especially in areas where housing is less affordable.

While more and more Brits are living in overcrowded homes. According to the English Housing Survey (EHS), 8.7% of social renters live in cramped homes as do 6.7% of private-renting households.

In 2022, there were 94,870 households living in temporary accommodation, of which 120,710 were children.

The Department for Levelling Up, Housing and Communities said: ‘Our reforms will ensure the taxpayer gets best value for money, by removing ‘hope value’ where justified and in the public interest,’ a spokesperson 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.’

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