Invest & Fund reacts to Labour’s planned housebuilding reforms
Invest & Fund has said that small, private housebuilders would “play a considerable role in unlocking the benefits” of Labour’s proposed development land reforms.
The Labour Party has pledged to force landowners sitting on unused development land to sell it at a fraction of the market price to cut housebuilding costs.
Councils would be given powers to use ‘compulsory purchase orders’ (CPOs) to buy land at a price that does not reflect the value of potential planning permissions.
“Private-sector homebuilders, particularly in the small- and medium-sized enterprise market, will play a considerable role in unlocking the benefits of these types of reforms,” said Invest & Fund in a blog post on its website. “If this scenario plays out, we anticipate further accompanying reforms, incentivising the sale of public land into that market, given that opening up affordable sites is a crucial factor in what’s currently stalling the nation home building progress.”
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There is currently a mammoth gap between the value of agricultural land and fields with permission. Land worth £22,520 per hectare as agricultural land can on average be worth £6.2mn per hectare with permission, according to figures from the Centre for Progressive Policy think-tank cited by the Financial Times.
“Any business working closely with that sector will know that smaller, hungrier developers are solely focused on growth and will be traditionally based in the community they are building in, looking to move from site to site in that area as their business develops, adding value to the area, rather than a corporation that may choose to hold the land over a much more extended period on a balance sheet,” Invest & Fund added.
“If the goal at this point is to build as many quality homes as possible, by process of deduction, the logical answer lies in supporting the people whose motivations align with the nations.”
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The Labour Party is also exploring the controversial idea of building on the Green Belt – a ring of countryside protected from urbanisation around key cities.
Invest & Fund said that it was a “nuanced” debate that would likely meet strong resistance from the countryside. As such, the platform predicted that “rather than damaging and aggressive reforms, areas that are subject to real redevelopment needs, areas of rural poverty that require job and community creation, and areas of high immigration, will welcome a certain level of increased development, and that will be the focus, rather than a forced debate between the nations needs versus wants.”
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