Scrapping hope value could put regeneration schemes ‘at risk’

The warnings came in response to reports that, if elected, a Labour government would pass a law to allow local authorities in England to buy land through CPOs without needing to factor in the price premium demanded by developers hoping to secure planning permission.

Ian Fletcher, director of policy at the British Property Federation, said: “The development process generates significant value and income to the surrounding area; we would much rather see a collaborative process that encourages landowners to co-invest their land with public authorities in return for long term sharing of value.

“Proposals to scrap hope value within the CPO process is likely to lead to protracted legal challenges and increase the risk of regeneration schemes being delayed or not progressing. For any incoming government, such a policy is unlikely to deliver much new housing in its first five years.”

Lawrence Turner, director in the Bristol office or urban planning specialist Boyer, agreed: “The problem with Labour’s proposals is that compulsory purchase takes a long time to process and is very costly and resource-intensive for local planning authorities.

“Other complications typically involve protracted negotiations with owners, legal challenges and extensive public consultation and paperwork. I have seen instances in Bristol where I am based, where CPOs have taken more than 20 years on some sites. Unfortunately, this policy doesn’t have the potential to deliver the homes as quickly or as cheaply as the headlines suggest.”

Meanwhile, Rico Wojtulewicz, head of housing and policy at the National Federation of Builders, said he was “sceptical” that any government or party would “push forward through a coherent land use policy”.

He added: “This is a land usage issue, not a land price issue. Labour, as a central government, would have to ensure local authorities were delivering the housing that local areas need, as well as local infrastructure needs.”

However, Will Jeffwitz, head of policy at the National Housing Federation, said the proposal “could help divert landowner profits into desperately needed new social housing and community infrastructure”. He added: “Crucially, the effect would bring down land values across the market, making it easier for social landlords to buy and develop new social housing. We require daring and innovative housing policy that will enable social landlords to build the affordable homes people across the country desperately need.”

Echoing these comments, Brian Berry, chief executive of the Federation of Master Builders, claimed any policy to “make it easier to purchase land” would be a positive step.

”The biggest issue holding back small housebuilders is the ability to find available and viable land,” he said. “We would advocate that any developments unlocked through this proposed reform use a diverse range of housebuilders, from small to large, to maximise the opportunity for all sections of the industry.”

A spokesperson for the Department for Levelling Up, Housing and Communities pointed out that the current government was reforming compensation for CPOs and added that proposed amendments to the Levelling Up Bill included allowing prices for CPOs to be decided on a case-by-case basis.

“The current rules can significantly increase costs for councils and our reforms will ensure the taxpayer gets best value for money, by removing ‘hope value’ where justified and in the public interest,” the spokesperson said.

Source: Property Week