Land Value Capture reform will stifle communities investment and stunt housing
The property sector urges the Government to approach Land Value Capture (LVC) reform with caution, as new recommendations published today by the Housing, Communities and Local Government Committee could have unintended consequences on investment into communities and new housing delivery across the UK.
Development and regeneration benefit people and the economy through creating jobs, the homes we live in, and the buildings and spaces in which we work and relax.
The property sector is committed to funding the infrastructure that supports this growth – and, rather than attempting to repeat further LVC reform, which history has proven will fail, the Government should be supporting new measures that have demonstrated success for both public and private sectors, such as Strategic Infrastructure Tariffs.
Ian Fletcher, Director of Real Estate Policy, British Property Federation comments:
“Land values vary significantly across the country and there will be many locations across the midlands and the North, and on brownfield land, where there is no value to capture. Crudely applied reform imposed in these locations will deter much-needed private sector investment into housing delivery and our town and city centres.
“Where there is significant land value uplift, there is substantial private sector investment available for new public infrastructure. Developers committed £6 billion towards the Community Infrastructure Levy (CIL) and Section 106 (S106) in 2016-2017, in addition to paying other taxes, and the real estate sector is now more heavily taxed in the UK than any other country in the Organisation for Economic Co-operation and Development.
“In London, the real estate sector is contributing £600 million to the cost of Crossrail via the Mayoral CIL and S106, and encourages other UK regions to adopt Strategic Infrastructure Tariffs to collect funding in this way.
“At a time when the UK must be building more homes, finding land is critical to success. However, if landowners don’t get the uplift in value from change of use, fewer landowners will come forward with land. This will exacerbate the housing crisis. The proposition made is that the state will intervene and buy private land via a compulsory purchase order (CPO). CPO should, however, only be used in very limited circumstances as it is an extreme measure which infringes property rights if fair compensation is not provided.”
Kindly shared by British Property Federation (BPF)