In the two decades from 1945, Britain created a wave of settlements near major cities – such as Harlow, Stevenage and Crawley, with the last ‘new town’, Milton Keynes, founded in 1967.
This means that Britain has not created a major new settlement in my lifetime – and I am in my early 50s. During that period, the population of this country has grown by no less than 15 million people.
The original new towns were built on land purchased by dedicated, state-sponsored “development corporations,” which were empowered to purchase agricultural land at lower prices without having to factor in “planning increases.”
When a residential building permit is granted, land prices often increase two or three hundred times, driving up house prices. Today, this increase largely benefits landowners.
Given that land currently accounts for an average of 50 to 60 percent of the cost of new homes, a return to a post-war compulsory purchase order (CPO) mechanism, which transfers all planning relief to the state, could lead to a sharp fall in the price of new homes.
This is what Labor is now proposing: a model for land acquisition that would be highly controversial, not least among landowners, but which could also be popular with countless young adults who are currently out of home ownership.
In my book Home Truths I proposed a more moderate development model that does not rely on CPO and where the “planning increase” is shared equally between local authorities and landowners. Local authorities could then use their share of the increase to build the necessary infrastructure – roads, schools, hospitals, etc. – in parallel with the houses built by private developers.
Labor’s plans remain vague. But from what I understand, they are unreasonably confiscatory and would trigger countless lawsuits. It makes sense to split planning gains 50:50 as Labor’s ideas are then more likely to be widely accepted and less likely to be reversed by future Tory governments.
Comments are closed.