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Government must overhaul land laws to stop developers pocketing increases in value, NHF urges
The government must overhaul the way land is bought and sold to prevent developers from pocketing vast sums of money and pricing housing associations out of the market, the National Housing Federation has said.
New research carried out by the Centre for Progressive Policy and the NHF found that landowners in England made more than £13bn in profit in 2016/17 alone – more than the global profits of Amazon, McDonald’s and Coca Cola combined. The figure had jumped from £9bn two years previously.
Agricultural land now becomes 275 times more expensive once it receives planning permission, even before a single home is built. Two years ago, planning permission increased the value of farmland by around 100 times, the report found.
Announcing the research on the first day of its Housing Summit, the National Housing Federation said that if more of the increase in land price was captured, the government could use it to fund as many as 100,000 affordable homes each year.
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At present, the jump in value raises prices making it hard to buy land for new social housing because organisations trying to build affordable homes are increasingly outbid by private developers.
These developers often build fewer affordable homes, allowing them to sell more homes for high prices and so pay more expensive prices for land.
The NHF report cited examples including Stafford and Rural Homes (SARH), in Staffordshire, which has placed bids on ten sites so far this year, but has been outbid on all but one.
On one site, SARH planned a development made up entirely of affordable homes on public land, but were outbid by a private developer, who sold the site for a profit shortly after, without building any homes.
Meanwhile, Housing Plus Group bid for a plot of disused public land in the West Midlands to build a development made up entirely of affordable homes, but their offer was rejected in favour of plans for a luxury care home where the developer offered a higher price for the land.
The NHF urged the government to undertake a “radical overhaul” of land sales laws so some of the profit can be used to fund housing and infrastructure, such as roads.
David Orr, chief executive of the NHF, said: “In the face of a disastrous housing crisis, it is clear that the broken housing market is simply not delivering. What’s more, the way we buy and sell land is the key cause. Now, we need a fundamental rethink to tackle this fundamental problem."
