MPs launch inquiry into land value policies

MPs have launched an inquiry to look at how land value capture policies – which capture the value uplift on land when it is granted planning permission – can contribute to the delivery of the Government’s house building plans.

The Housing, Communities and Local Government (HCLG) Committee will consider possible reforms to the current system of developer contributions towards affordable housing and infrastructure.

It will also examine the Government’s plans to reform compulsory purchase compensation rules, and how increases in land value may be captured more effectively for public good.

The cross-party committee will explore how land value capture (LVC) mechanisms could be improved or reformed to operate with the Government’s planning reform agenda, including the delivery of new towns and the release of grey belt land for development.

Launching the inquiry, Florence Eshalomi, chair of the committee. said:

“If the Government can get its land value capture policies right, they could make a valuable contribution to funding affordable housing and investing in public infrastructure, such as GP surgeries, and schools. Reform of land value capture could also be a useful tool in supporting the delivery of the Government’s New Towns programme.

“We are in the middle of the housing crisis and the cost of land is one of the main reasons that house prices are rising so rapidly. Currently, landowners can make significant profits from the substantial increases in land value when local authorities grant planning permission. We need a land value capture system which is fair and that helps to deliver what communities need – affordable housing and public services which people can rely on.

“I hope the inquiry will bring forward practical recommendations to reform land value capture and help the Government achieve its target of delivering 1.5m new homes by the end of this Parliament.”

Public evidence sessions are expected to commence in March 2025.

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