Florence Eshalomi’s housing select committee will also look at compulsory purchase rules
Parliament’s cross-party housing committee has launched an inquiry into how land value capture could contribute to delivering new homes.
The housing, communities and local government (HCLG) committee will investigate whether the policy, which seeks to capture the value uplift on land when it is granted planning permission, can help the government meet its ambition to build 1.5m houses in this parliament.
Its inquiry will consider possible reforms to the current system of developer contributions towards affordable housing and infrastructure and examine the government’s plans to reform compulsory purchase compensation rules.
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.
Existing land value capture methods include the Community Infrastructure Levy and planning obligations under Section 106 of the Town and Country Planning Act 1990.
The committee’s inquiry will look at whether “alternative mechanisms” for capturing land value uplift could be more effective and explore how value could be realised in English regions with lower average land values.
The committee expects to hear from housing and planning groups, planning lawyers, think-tank representatives, local government elected representatives, and housing minister Matthew Pennycook.
Public evidence sessions are expected to begin in March.
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