SME developers and housebuilders should get a greater slice of the action under local authorities’ new powers to buy land for affordable or social housing. 

Councils and Homes England can now acquire land through compulsory purchase orders, CPOs, providing it’s in the public interest to enable affordable or social housing or for health or education.  

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 across communities across the country.” 

National Federation of Builders policy and market insight head Rico Wojtulewicz said: “We welcome it from a place making point of view. It will give local authorities the opportunity to arrange land for development and subdivide a large portion of the site and this will support SMEs.” 

The new powers were brought in this week under the levelling up and regeneration act 2023 and remove the need to pay ‘hope value’ costs based on the final development value of the land.  

The government hopes this will make it cheaper and easier for councils to buy land earmarked for affordable or social housing. 

“Local authorities complain about big developers buying land allocated in the local plan for development but not building on it because they can’t make it work commercially. Now they will be exposed to the same risks.” 

Planning policy must support new CPO powers 

Development company Folkestone Shoreline said a planning policy was needed to support local authorities’ new powers. 

“That’s the first move, we just need local plans to follow the same principle, so land availability is in place at cost.” 

National Housing Federation chief executive Kate Anderson added: “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 department of levelling up and regeneration highlighted several examples across the country where CPOs have successfully been applied. 

Leicester city council used a CPO to acquire derelict industrial land at Friars Mills to build 500 new homes and regenerate the city’s waterside area with new offices and retail space.  

Derelict land on the edge of Sheffield city centre was bought for a mix of new homes, offices, retail outlets, leisure facilities and a hotel. 

An empty supermarket and terrace of shops was bought in Wellingborough to pave the way for a housing development and land from a former owner who had stalled development was bought for new housing in Helmsley, North Yorkshire. 

Brokers Hank Zarihs Associates said development finance lenders regarded this as a new direction the government was taking to support place making and building of new homes.  

Government must commit to pipeline of retrofit work to incentivise upskilling
Biodiversity net gain is making small housebuilding schemes a nightmare
author avatar
Shiraz Khan