The labour party is set to propose a new policy allowing local authorities to use compulsory purchase powers to acquire land at below market value. According to a report in the Financial Times, if the party wins the next election, the proposals mean landowners could be forced to sell land without factoring in ‘Hope Value’, which is the added value a plot gains when it has a prospect of achieving planning permissions.

Richard Farr, of Sanderson Weatherall commented:

“There is no denying that we have a housing crisis rooted in a lack of supply and a housing stock unable to deliver the energy efficiency required by a modern society. Labours policy to increase the supply of land for housing by using powers of compulsory purchase while at the same time suppressing Hope Value is understandable but ill-conceived.

“However, many will view the policy as a land grab funded by the suppression of market value. Such policies have been tried before, Development Land Tax springs to mind. Add to that under resourced acquiring authorities, the perceived risk of pioneering a new power, throw in angry and resistant landowners, opportunity for debate over the definition of compensation and the initiative is doomed.

“Before creating property market policy please can the politicians consult with the market-makers and experts to ensure that there is an opportunity to deliver and actually benefit from their initiative.”