Developers Could Withdraw from Building Homes Due to Labour’s Proposal to Use Compulsory Purchase Order
The UK Labour Party’s proposal to empower councils to use compulsory purchase orders (CPOs) to buy land at lower prices could lead to a two-tier housing market, according to Emily Williams, the Director of Residential Research at Savills. She added that if this happens, developers could back out from building homes and invest more in other areas such as warehouses, where the returns may be stronger. Williams believes that Labour’s proposal does not address the housing shortage issue in the UK, as the current onerous planning system and nimbyism contribute greatly to this problem.
A Return to Post-war Britain
Britain has used compulsory purchase orders before to build homes. After World War II, the post-war government decided to force landowners to sell their property at agricultural values in the national interest. With no time to bargain and homes in dire need, the country needed to build 750,000 houses quickly. This led to the birth of post-war new towns such as Northampton, Milton Keynes, and Peterborough.
Agile Nation
The main reasons for the housing shortage are the current onerous planning system and nimbyism. Labour’s proposal to use CPOs will not solve planning delays. Williams said that prior CPOs have been abandoned because the system became unfair, and some people were still paying full value for the land while others had deep discounts. She added that too much government intervention in the private market was unfair.
Problems with the Utilization of CPOs
When a property owner receives a CPO, court action can be taken against them, but it can take years. For example, an incident in Hertford took three years. Cooper, an estate agent at Walter Cooper, said that back then, the use of CPOs was co-societal, where veterans were paid to work on farms. However, some people question whether too much government intervention in the private market is fair.
Summary:
The UK Labor Party has proposed that councils use compulsory purchase orders to buy land at lower prices to ease the housing crisis in the country. However, the proposal could lead to a two-tier housing market. Property owners could sell their land privately at higher prices or at lower prices to comply with CPOs. This may lead to developers withdrawing from building homes and investing more in warehouses. Britain has used compulsory purchase orders before to build homes, but some argue that too much government intervention in the private market can be unfair. Experts suggest that Labour’s proposal does not address the main issues of the housing crisis: the current onerous planning system and nimbyism.
Additional Piece:
Why the Planning System and Nimbyism are the Root Cause of the UK Housing Crisis
The UK is in the midst of a housing crisis, with many struggling to buy or rent affordable homes. Labour’s proposal to use compulsory purchase orders to buy land seems like a plausible solution, but it does not address the root cause of the problem.
The housing shortage in the UK has resulted from the planning system and nimbyism. The onerous planning system slows down the planning process and raises costs for developers, who then pass them on to buyers. This has made it difficult for developers to build affordable homes, particularly for those on lower incomes.
Moreover, nimbyism – short for “Not In My Backyard” – has also contributed to the housing crisis. Nimbyism is the reluctance of people to support new development projects in their communities. Many people object to new housing developments for various reasons such as disruption and lack of amenities.
The UK needs to tackle the root cause of the problem and confront these two issues head-on. A possible solution would be to appeal to the public’s conscience through education and awareness campaigns. The government could also reduce the complexity and cost of the planning system and revise housing targets. Another option would be to provide incentives for developments that are sustainable, energy-efficient, and provide public spaces.
The UK needs a proactive approach to address the housing crisis. It should be a collaborative effort between developers, governments, and communities. Dealing with the root causes of the problem is the way to build houses that everyone can afford.
In conclusion, solving the UK’s housing crisis requires a multi-pronged approach that addresses the root causes of the problem. Labour’s proposal to use compulsory purchase orders to buy land is a potential solution but does not solve the problem. The UK needs to reduce the complexity and cost of the planning system, revise housing targets, and provide incentives for sustainable developments. It also needs to encourage public participation to create sustainable and affordable communities.
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Emily Williams, director of residential research at Savills, said: “This idea has come up before, and historically what has happened is that it creates a two-tier market.
“People sell their land at a lower price or sell it privately at a higher price. If this happens today, we could see developers pull out of building homes and instead invest in different uses, like warehouses, where the returns would be much stronger.”
A return to post-war Britain
Britain has used compulsory purchase orders to build houses before. After World War II, in which virtually no new houses were built for six years and half a million properties were destroyed, the country suddenly needed to build 750,000 houses overnight.
With no time to bargain and houses in dire need, Britain’s post-war government decided to force landowners to sell their land at agricultural values in the national interest.
In May 1946 the ‘new towns’ of the postwar period were born. The first to emerge included Stevenage, Crawley and Hemel Hempstead, before the last ones were built in the late 1960s, including Milton Keynes, Northampton and Peterborough.
Simon Cooper, of estate agent Walter Cooper, said: “Back then, it was an emergency. The CPOs were used primarily to purchase farms and ranches. Many people had lost their children, so they had no one to pass their property to.
“There was more of a national spirit back then. Veterans would be paid to work on these farms, so it was co-societal.”
The CPOs were eventually abandoned. Ms Williams added: “Part of the reason this didn’t work before was because the system became unfair. Some people were still paying full value for the land, while others had deep discounts.
“People began to question whether so much government intervention in the private market was fair.”
CPOs have most recently been used by the Government to pave the way for the controversial HS2, the high-speed rail route from London to Manchester.
Those who receive a CPO can file a court order against them, but this can take years. Mr Cooper cited an example in Hertford that took three years.
agile nation
Experts argue that Labor’s plans do not address the main reasons for the housing shortage: the onerous planning system and nimbyism.
While Sir Keir has pledged to bring back housing targets, experts say his CPO plans will not help alleviate planning delays.
https://www.telegraph.co.uk/property/news/labour-plan-seize-land-cast-shadow-over-countryside/
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