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Fundamental land market reforms missing in Housing White Paper

17 May 2017

Housing White Paper Response

The Government should reform the 1961 Land Compensation Act to allow local authorities to compulsorily purchase land at existing use value and capture the increase in land value following public investment in infrastructure, the RTPI said in its response to the Housing White Paper.

Making better use of the powers of development corporations in the reformed New Towns Act will help to achieve this, the RTPI says. It also wants local authorities to be able to sell land with planning consent which they have granted themselves, allowing them to keep the increase in land value while adding certainty for developers. 

“There are many useful measures in the Housing White Paper, but some fundamental ones required to change the unhealthy behaviours of the land and house building market are sorely missed.

In addition, the Institute thinks the White Paper should have gone further in allowing local authorities to apply for permission on land they do not own. This would ensure planning permissions are in the best places for development and speed up the permission process.

Free and transparent land ownership data is also a key first step to help address the issue of land owners holding on to land and selling for high prices, the RTPI says.

Trudi Elliott, RTPI Chief Executive, said:

“There are many useful measures in the Housing White Paper but some fundamental ones required to change the unhealthy behaviours of the land and house building market are sorely missed.

"We are especially disappointed there is no mention about improving the land value capture mechanism – the single most useful instrument to channel value generated by development towards infrastructure and social housing without incurring more public debt.”

The Institute said infrastructure needs to be prioritised in locations where the largest area of land ready for development can be ‘unlocked’ rather than just in places where there is an existing need. If infrastructure is only invested in areas with existing need regional imbalances may be reinforced rather than encouraging growth and investment in other areas.

The Institute has also warned about the limited connections between the UK Government’s housing and industrial strategies and the way infrastructure is connected to development. It says the government has failed to provide enough incentives for local authorities to work together across their respective boundaries to deliver housing, infrastructure and development.

The Institute has welcomed the increase in fees for planning applications but are concerned the measures may not be sufficient to mitigate the impact of years of under investment.

Read the RTPI’s full response to the Housing White Paper.

Read: Current approach in clawing back development gain not adequate