“Increases in land value is ‘fundamentally about fairness’ and should benefit local communities, say MPs”

Owl says: chances of this happening in these developer-led days – zero,

“Significant increases in the value of land resulting from public policy decisions should be shared with local communities say MPs.

The report from the Housing, Communities and Local Government Committee has looked at how this land value increase can be captured to generate extra funding for local infrastructure and affordable housing.

According to government statistics, agricultural land which is granted planning permission for residential use would increase, on average, from £21,000 per hectare to £1.95m per hectare.

The Land Value Capture report published yesterday argues that local authorities and central government should capture a “significant proportion” of this uplift in value so they can reinvest into local communities.
The report recommends reform of the Land Compensation Act 1961 which they say would lead to a “much-needed” boost in housebuilding.

Chair of the committee Clive Betts said: “Land value capture is fundamentally about fairness and necessity.

“Fairness, because the current system allows landowners, through no effort of their own, to make multi-million-pound profits from the substantial increases in land value that arise from public policy decisions, such as the granting of planning permission.

“As these increases are significantly created by the actions of the state, it is right that a significant proportion of this should be shared with the local community.”

The committee argues that there is scope for raising additional revenue from reforms to taxes and charges, new mechanisms of land value capture and reform of the way local authorities can buy land.

In response to the report, Local Government Association’s Housing spokesman Cllr Martin Tett said: “We have long–called for reforms to land compensation and compulsory purchase laws and are pleased that the committee has called for the government to implement several of our recommendations.
“We are also pleased the committee recommends that government provides extra support to councils, through the LGA, to help give local authorities a strong hand in negotiations with developers.

“Government action on these recommendations would have a significant impact in building more homes with the right infrastructures and places that people want to live and work.”

Betts added: “If the government is to meet the challenge of providing enough new homes over the coming years, then they will also need to find the funds for improving the surrounding infrastructure.

“Our proposed package of reforms to taxes and charges will ensure a fair proportion of the increase in value arising from public policy decisions can be used by national and local government to invest in new infrastructure and public services.”

http://www.publicsectorexecutive.com/Public-Sector-News/increases-in-land-value-is-fundamentally-about-fairness-and-should-benefit-local-communities-say-mps

“Ireland sets up land agency as anger grows at housing shortage”

“… Despite being left with a surplus of houses after a 2008 property crash cut values in half, Ireland has been falling far short of the 35,000 new builds analysts say are needed annually just to keep up with demand from an economy and population growing faster than any other in the European Union.

Modelled on similar bodies in Germany and the Netherlands, the Land Development Agency (LDA) will be tasked with opening up land owned by local authorities, state departments, semi state bodies or in some cases the private sector to build 150,000 new homes over the next 20 years.

“We are acknowledging the reality that some of the sites that are causing this issue are in the ownership of public bodies,” Finance Minister Paschal Donohoe told a news conference.

“The adoption of a more pro-active land management role by the state is critical to solving the current housing crisis and creating downward pressure on land prices.”

Land for 3,000 units has already been secured from state bodies by the LDA, the government said, including, for example, by moving the country’s central mental health facility out of a Dublin suburb more suited to the construction of houses.

“Ireland has a poor history of managing its land in a sustainable way. This has resulted in inefficient use, sprawl and volatile price cycles,” Dermot O’Leary, chief economist at Goodbody Stockbrokers wrote in a note.

“While the impact from such an agency will not be felt immediately, it will be a welcome addition to the housing policy toolkit to aid in preventing some of the mistakes of the past.”

https://uk.reuters.com/article/uk-ireland-housing/ireland-sets-up-land-agency-as-anger-grows-at-housing-shortage-idUKKCN1LT2GM

“Land now 51% of UK’s net worth – a huge transfer of wealth to landowners, say campaigners”

“A dramatic rise in land values pushed Britain’s wealth to a fresh high of more than £10tn last year, highlighting the huge gains made by developers in property hotspots across the UK.

From London and the home counties to Cambridge and popular parts of Devon and Cornwall, land values have become the single largest element of wealth, dwarfing household wealth locked up in property and financial savings.

Official figures showed that the UK’s net worth rose by £492bn between 2016 and 2017 to £10.2tn, with the lion’s share of the increase accounted for by a £450bn jump in the value of land.

The rise continues a trend since 2012 that has pushed the average assets held by each Briton to £155,000, up £6,000 from 2016.

The Office for National Statistics said consistent increases in the value of land meant it accounted for 51% of the UK’s net worth in 2016, higher than any other G7 country that produces similar statistics.

In France, which has a land mass twice the size of the UK, land values account for 41% of wealth while in Germany they account for only 26%.

This week several landowners have outlined plans for developments, including the Duke of Westminster’s Grosvenor Group, which said it was taking a growing interest in residential property outside central London.

It said it would build thousands of homes on greenfield sites around Oxford and Cambridge, which are to benefit from Treasury plans to connect the two university towns with a cross-country rail link.

Analysts said much of the increase in land values was in response to Britain’s rising population, which has put pressure on the government to back house builders seeking to develop green field sites and farmland in south-east England and other development hotspots around the country.

The price of farmland can increase by 100 times when developers succeed in persuading ministers to re-designate it for housing. Areas of London that were previously derelict, especially in the east of the capital, have seen huge rises in values as regeneration efforts and improved transport links have fed into property prices.

Commercial property has also enjoyed an upswing in value since Britain’s recovery following the 2008 banking crash, more than offsetting recent declines in much of the retail sector.

The ONS figures go beyond a study last year by Lloyds bank that showed that Britain’s net worth had climbed above £10tn for the first time, but did not single out the value of land.

The steady increase in land values is expected to trigger further calls for a land value tax or new rules allowing local authorities to reap the rise in values by allowing them buy land earmarked for development.

A growing number of thinktanks and politicians support imposing a tax that would take a slice of rising land values.

The Institute for Fiscal Studies has urged the Treasury to develop a scheme, while the Green party co-leader, Caroline Lucas, has tabled a private member’s bill proposing a land value tax. Labour said in its 2017 election manifesto that it would consider a similar tax.

Mark Wadsworth, the head of the Campaign for Land Value Taxation, said: “The minority with a vested interest in high land values will no doubt celebrate higher values, saying that is shows the importance of land to the UK economy.

“In truth, land values are not a net addition to national wealth, they merely represent the benefits that accrue to landowners because of government spending on public services funded out of general taxation; land values are actually just a measure of ongoing transfers of wealth from taxpayers to landowners and a zero-sum game.”

https://www.theguardian.com/business/2018/aug/29/uks-wealth-rises-as-land-values-soar-by-450bn-in-a-year

“Call to stop landowners making huge profits from speculation”

Owl says: well, duh! How come it took this long to figure out! And the chances of anything being done while some of the big landowners are MPs and many many are Tory party donors … nil.

“Britain should limit the windfall gains of landowners by freezing the value of plots newly designated for housing, according to a thinktank urging sweeping reforms to tackle a national shortage of affordable homes.

Calling on the government to pursue land market reforms similar to the German model, the Institute for Public Policy Research said planning authorities should be given new powers to zone land for development and freeze its price.

It said speculation by landowners awaiting planning decisions that can trigger vast increases in the value of a plot, had the effect of exacerbating wealth inequality and was a “driving force behind the broken housing market” in Britain.

Luke Murphy, associate director at IPPR, said: “Conventional wisdom suggests that the UK has a problem with house prices, but the reality is that we have a problem with land.”

The sweeping reforms would mean national and local government organisations would benefit from the extra value generated by planning decisions, which could be used for local infrastructure or affordable housing, rather than landowners accruing massive returns from the state approving changes in the use of land.

Using the example of a hectare of agricultural land in Oxfordshire that would typically be worth about £25,000, the IPPR said it could skyrocket in value by more than 200 times on approval for residential development to be worth about £5.6m. While the landowner stands to benefit from approval, the increase drives up the cost of building homes.

Two years ago on average the price of land had risen to more than 70% of the price paid for a house, which the IPPR said could rise to about 83% over the next two decades given current trends in the housing market. Options to remedy the problem could include councils buying land and selling at higher prices to developers, or entering into partnerships with landowners to share the proceeds of the sale.

About half of net wealth in Britain is tied in up in land, having risen by more than 500% in the past two decades to stand at £5tn. Although the value of property built on land across the country has also risen, it has increased at a much slower rate, of around 219%.

According to a 2010 report for Country Life, a third of Britain’s land still belongs to the aristocracy, while some of the oldest families in the country have held on to their land for several centuries. The IPPR said the top 10% own property wealth averaging £420,000 in value, compared with the bottom 30% who own no net property wealth at all.

Murphy said: “Wealth inequality, a poorly functioning housing market, an economy focused on unproductive investment and macroeconomic instability are all negative consequences of our current speculative land market. … ”

https://www.theguardian.com/business/2018/aug/28/call-to-stop-landowners-making-huge-profits-from-speculation?

“Government £200m brownfields building fund falls flat, as number of new homes declines”

A £200million Government fund to pay for more homes on industrial land has resulted in the opposite effect, with fewer homes built on brownfield areas than before it was set up.

Official Government’s land use change statistics show that the proportion of new homes registered on previously developed land has fallen by 4 percentage points since 2014, when the fund was set up.

Yet over the same period the number of new residential addresses on supposedly heavily protected Green Belt land has increased by the same proportion – 4 per cent.

Separately, over the same period – 2013/14 to 2016/17 – the proportion of new residential addresses on the protected Green Belt land increased from 3 per cent to 4 per cent of all new homes built.

The Government’s record on building on brownfield sites was attacked by Labour which said minister’s commitment to building on brownfield sites was “hot air”.

The £200million fund was announced by Brandon Lewis, the current Tory party chairman and then then-Housing minister, in August 2014 so “councils across the country can now team up with developers and bid for government assistance to build thousands of new homes on previously-developed land”.

Mr Lewis published bidding criteria to create 10 housing zones on brownfield land, each able to deliver up to 2,000 new homes each.

The new zones, which will be outside London, should be large enough to deliver 750 to 2,000 properties and would help councils boost housebuilding on previously-developed land while safeguading the countryside, he said.

However John Healey MP, Labour’s Shadow Housing Secretary, said the figures showed that the Government had gone backwards on its pledge to encourage more building on brownfield sites.

He said: “If hot air built homes then Ministers would have fixed our housing crisis. Despite big promises to get building on brownfield land, official Government figures show we’ve gone backwards.

“It’s clear that Ministers are failing to get good value-for-money for taxpayers.

“By giving developers a free rein to do what they want, the Government is failing [to] get homes for local people built where they are needed.”

Matt Thomson, Head of Planning at the Campaign to Protect Rural England, backed the findings, saying that “promises to build the homes the nation needs while protecting the countryside are not being carried through.

“Our analysis of the government’s new ‘planning rulebook’ suggests that despite a lot of warm words current trends will continue, to the detriment of both town and country.

The government must stick to its guns and end this constant cycle of broken promises.

“They need to rein back greenfield development where suitable brownfield land is available, and discourage growth where it cannot happen without compromising their own policies intended to manage sprawl and protect open land.

Last week the CPRE warned that green belt was disappearing at an “alarming rate” with the equivalent of 5,000 football pitches lost because of a relaxation of planning laws.”

Source: Sunday Times (pay wall)

A useful critique on new planning regulations (local councils stay silent on their views)

Why CPRE thinks it is a developers’ charter (again):

https://www.devonlive.com/news/devon-news/new-planning-policy-framework-slammed-1892197

Project Planning Fear: MP Truss says rip up planning rules or get Corbyn!

“A cabinet minister faced a furious backlash yesterday after saying the Tories must build homes in the countryside – or they will hand power to Jeremy Corbyn.

Liz Truss, Chief Secretary to the Treasury, said planning laws should be ripped up as she complained about the number of Nimbys in Britain.

The outspoken minister said ‘a lot more’ sites needed to be opened up. She also called for those living in cities to be allowed to add extra floors to their homes without needing permission. Miss Truss argued the house-building overhaul was needed to keep Mr Corbyn out of Downing Street at the next election.

Liz Truss argued the house-building overhaul was needed to keep Jeremy Corbyn (pictured) out of Downing Street at the next election

But Tory colleagues warned the party would be ‘run out of office’ if it went ahead with ‘catastrophic’ proposals that fail to protect rural Britain and the green belts around London and other major cities.

The row comes a day after campaigners warned the green belt is already being ‘gobbled up at an alarming rate’ to build thousands of homes.

A report from the Campaign to Protect Rural England, published yesterday, showed plans for almost 460,000 homes have been pencilled in for green belt land since 2013 as councils lift planning protections, opening the way for developers.

Asked in an interview whether she would you be happy to ‘start paving over our green and pleasant land’, Miss Truss replied: ‘I do think we need to open up more land for building, a lot more. There are a lot Nimbys in Britain.’

Questioned on whether there are many ‘not in my backyard’ objectors in her own party, she said: ‘There are, but I think it is a dwindling number.

‘People recognise the choice is building on more greenfield sites and making sure there are enough homes for next generation or losing the election and ending up with Jeremy Corbyn, whose policy appears to be appropriating property.

Liz Truss, Chief Secretary to the Treasury, said planning laws should be ripped up as she complained about the number of Nimbys in Britain

‘So I know which one I’d choose – it’s having more homes available on the open market for people of whatever generation to afford.’ The minister added: ‘I also think we need to make it easier to build up in cities. I quite like the Japanese system where essentially you can build up on top of your house without having to get extra planning permission. I think we need to be more liberal about these policies.’

Miss Truss, who was appointed second-in-command at the Treasury last June after previously serving as justice secretary and environment secretary, said in the interview with the Financial Times’ politics podcast that she would one day like to be the country’s first female chancellor. ‘Well, who would say no to that?’ she said.

But when asked if she would like to be prime minister, Miss Truss, who is MP for South West Norfolk, replied: ‘I’m not sure about that one.’

Tory former minister Crispin Blunt last night warned the party it would suffer an electoral ‘catastrophe’ if it does not protect the green belt. The MP for Reigate, who is co-chairman of the all-party parliamentary group for London’s green belt, said Conservative local councillors already faced being ‘run out of office’ in areas where ministers had raised housebuilding targets.

‘Residents’ associations are going off their rocket,’ he said.

Mr Blunt said trying to meet demand in the South East was ‘sucking the best and brightest out of the North’. Hindering development in the South-East would encourage growith in the North, he added.

Tom Fyans of the CPRE said: ‘We agree that there is a severe lack of affordable homes available for people to buy and rent.

‘However, what Liz Truss fails to recognise is that, opening up the green belt will not solve this issue.

Tory former minister Crispin Blunt (pictured) last night warned the party it would suffer an electoral ‘catastrophe’ if it does not protect the green belt

‘Almost three quarters of the homes built on green belt land last year were unaffordable.’ He said the ‘perfect solution’ to ‘this barbaric assault on the green belt’ was to use brownfield land to its full capacity.

The CPRE’s report showed there are plans for almost 460,000 homes on green belt land. Green belt areas can be built on if councils grant planning permission directly or remove the land’s official status. Both methods have been used.

Only 70 houses or flats were built in the green belt in 2009/10 compared with 8,143 in 2017/18.

Miss Truss has become one of the most prominent advocates in the Cabinet for free market liberalism. Earlier this year, she attracted attention for a speech in which she appeared to ridicule the Prime Minister’s plan to ban plastic straws.”

http://35.192.208.249/2018/08/07/tory-minister-liz-truss-sparks-fury-after-demanding-laws-protecting-green-fields-are-ripped-up/