Login | Register

Government rebuffs calls for big reforms to the land value capture system

Words: Huw Morris
London housing estate

The UK’s major real estate companies have welcomed government assertions that housing delivery will remain a priority and it will not risk undermining land supply.

The Commons Housing Communities and Local Government Committee had called for a significant proportion of the uplift in land values after planning permission to be available to the state to invest in new infrastructure and public services.

It urged reforms to existing taxes and charges, improvements to compulsory purchase powers and new mechanisms of land value capture.

Responding to the committee, the Ministry of Housing, Communities and Local Government said that while there is scope for claiming a greater proportion of land value increases, its priority is delivery and to “provide more higher-quality housing more quickly”. The government’s priority is “to evolve the existing system of developer contributions to make them more transparent, efficient and accountable”.

It pledged to explore options for reforms, “providing it can be assured that the short-run impact on land markets does not distract from delivering a better housing market”.

The British Property Federation welcomed the government’s response, adding that finding land is critical to success at a time when the UK needs to build more homes.

“If landowners don’t get the uplift in value from change of use, fewer landowners will come forward with land,” said real estate policy director Ian Fletcher. “This will exacerbate the housing crisis.

“The government’s priority is delivery and to provide more high-quality homes and communities, more quickly. So, it is right that the government focuses on improving the existing system of developer contributions to make them more transparent, efficient and accountable.”

Image credit | iStock