New powers for councils to help build more affordable homes

30 Apr 2024 12:41 PM

Councils across the country will be able to buy cheaper land to help build thousands more social and affordable homes, thanks to new Government reforms coming into force today, as part of the long-term plan for housing.

Councils will be able to buy land for development through the use of Compulsory Purchase Orders without paying inflated ‘hope value’ costs. ‘Hope value’ estimates the cost land could be worth if it was developed on in the future, meaning councils are forced to pay potentially thousands more to buy land for housing or developments and get stuck in lengthy disputes about costs.

The new measures will remove hope value in certain circumstances where Compulsory Purchase Orders are being used and make it cheaper and easier for councils to transform communities by building new homes.

Levelling Up Minister Jacob Young said:

“Our changes will act as a catalyst for investment in our towns and cities and drive much needed regeneration in communities across the country.

“We know we need to build more homes and alongside our Long-Term Plan for Housing, these changes will help us do that, unlocking more sites for affordable and social housing, as well as supporting jobs and growing the economy.”

Kate Henderson, Chief Executive of the National Housing Federation, says:

“Enabling local councils to buy cheaper land through Compulsory Purchase Orders without paying ‘hope value’ will allow them to build more of the desperately needed affordable homes the country needs, in the right places for the people who need it most.

“To solve the housing crisis and unlock the land needed for these homes, these changes must sit alongside wider reforms to planning policy which should form part of a nationally coordinated fully funded long-term plan for housing.”

The Levelling-up & Regeneration Act 2023, allows bodies such as Homes England and councils using Compulsory Purchase Orders and looking to build, to apply to the Secretary to remove ‘hope value’. This is under the condition development is in the public interest and is facilitating affordable or social housing, health or educational uses.  

Compulsory Purchase Orders have previously been successfully used across the country to facilitate development. Examples include:

• The ongoing major regeneration of Leicester’s Waterside and the development of up to 500 new homes, as well as new office and retail space. This involved Leicester City Council acquiring the Friars Mills site via a Compulsory Purchase Order and helping bring derelict industrial land back into use.
• The development of derelict land on the edge of Sheffield city centre for a mix of new homes, offices, retail, leisure and a hotel.
• The acquisition of an empty supermarket and a terrace of empty shops in Wellingborough to pave the way for housing development
• The development of new housing in Helmsley, North Yorkshire that had been stalled by the former landowner.