Reforms to remove ‘hope value’  from Compulsory Purchase Order calculations proposed under shake-up

The government has published its proposals for changing compulsory purchase order (CPO) powers to allow councils to buy land for affordable housing development at a lower price.

Vacant plot shutterstock

In a consultation paper today, the Ministry of Housing, Communities and Local Government set out plans aimed at making it easier for councils, combined authorities and other bodies, including Homes England, to buy vacant land from landowners.

Under the proposals, public bodies will not have to pay ‘hope value’ costs – which include an estimate of what the land could be worth if developed on in the future – if the development is in the public interest.

The previous government’s Levelling Up and Regeneration Act brought in a power for directions to be included in CPOs to remove ‘hope value’ from calculations of compensation to the landowners.

The Labour government is now proposing expanding this further to allow CPOs to be made on behalf of town and community councils by local authorities to remove ‘hope value’ where they schemes are facilitating affordable or social housing.

The paper said the government’s engagement with town councils has indicated there is “scope for an increased use of CPOs on their behalf to enable small schemes where back-to-back agreements could be arranged with registered providers of affordable housing.”

Matthew Pennycook, housing minister, said: “In our manifesto, we committed ourselves to further compulsory purchase reform to deliver more housing, infrastructure, amenity, and transport benefits in the public interest.

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“The consultation we are launching today is the next step in fulfilling that commitment – proposing reforms that will make the process faster and more efficient, enabling more land value to be captured and then invested in schemes for public benefit.”

The consultation will run into 13 February.

The government also announced in a separate consultation that it will remove the New Homes Bonus in its current format after 2025/26.

The bonus is paid to councils as an incentive to ensure delivery of housing in their areas, however it has faced criticism for not being allocated according to need.