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Forcing people to sell land for below market value is unreasonable and unworkable, says Aston Mead
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Leading land broker Aston Mead Land & Planning has hit back at a theory that landowners should be forced to sell potential building plots to councils at drastically reduced rates, in the event of compulsory purchase by the state.
Director Adam Hesse was responding to a suggestion made by the Editorial Director of Civitas, Daniel Bentley, who was putting forward an idea to “fix the broken housing market”, in TheDaily Telegraph last week.
In the article, Mr Bentley writes: “In simple terms, councils would be allowed to purchase land that doesn’t currently have planning permission at something close to its value as, say, farmland before then granting themselves planning permission for housing. The financial benefits would be immense, given that agricultural land is valued in the tens of thousands per hectare whereas each hectare of land with permission for residential construction can be worth millions.”
Responding to the suggestion, Adam Hesse commented: “Why should people be forced to sell land for below its potential market value? Such an idea is hardly going to go down well with thousands of landowners across the country, who are currently protected by the 1961 Land Compensation Act – which means that if they receive a compulsory purchase order, they are entitled to the full value of their land as if it had residential planning permission.
“Instead, the Government should put its own house in order first, and use land owned by local authorities – who are some of the largest landowners in the country. As councils can borrow money from Government at discount rates well below 1 per cent, they could build cheaply and with precisely the right quantity and design of homes, tailored to the needs of each local community.
“Only once such land has been exhausted should we consider offering landowners a lower price for their land – but then only with a guaranteed offer of 50% of any uplift value once planning permission has been obtained. For sites where planning was unlikely without government intervention, this would mean that both seller and buyer would benefit.
“But ultimately, instead of the frankly unreasonable and unworkable suggestion that private landowners should be forced to sell land for below market value, it’s actually local authorities which should be taking up the slack and help to transform our beleaguered housing market.”