“Land for the Many” – potential future land reform under a Labour government

A report commissioned for the Labour Party entitled “Land for the Many” has been published, proposing radical changes to the way that land is used and controlled in the United Kingdom. It makes many recommendations which are described as “proposals to the Labour Party” to consider as part of its policy development process in advance of the next general election. The Labour Party’s response to the report is awaited. Given the current state of the political landscape in the UK, and with a general election potentially in the offing, it will be interesting to all those with an interest in UK property, be it as an investor, developer or property owner, to see how many of these ideas gain momentum over the coming months.

Included in the proposals are:

Transparency: free and open access to information on who owns land will be required, including the identity of beneficial owners. Specific measures include a public register of charges and options over land titles, public databases of the prices paid for all property and of public subsidies paid on land and a full register of planning permissions, including developers’ commitments. The report calls for the Land Registry and the Ordnance Survey to become executive agencies of government.

Stabilisation of house and land prices to discourage land and housing being treated as financial assets: measures proposed to achieve this include an ambitious social house building programme, major reforms of the private rented sector (eg a cap on annual permissible rent increases, limited grounds for eviction within the first three years of a tenancy, increased eviction notice periods and a national register of landlords) and encouragement of a shift in bank lending away from real estate towards more strategically useful sectors of the economy.

The creation of a Common Ground Trust is proposed as a publicly-backed but independent non-profit institution which would buy the land beneath houses and lease it to members. It would act as a vehicle for bringing land into common ownership by creating a mechanism for the gradual, voluntary, but potentially large scale, transfer of land.

Tax reform: a shake-up of many of the taxes considered by the report to be inadequate, regressive and economically inefficient such as council tax (the suggested replacement is a progressive property tax payable by owners and including vacant and derelict residential land), SDLT (phased out for those buying homes to live in themselves), CGT (increased for second homes and investment properties), business rates (replaced with a Land Value Tax) and inheritance tax (abolished and replaced with a lifetime gifts tax). The taxation of offshore owners would be extended.

Increased involvement of local authorities and the community in development plans and proposals: Public Development Corporations should be the prime movers in the land market. Community-led development and ownership of land should be promoted, including Community-Led Housing (“CLH”) as a means of taking land into permanent community ownership, the introduction of a new “Community Right to Buy”, and the creation of powers to assign sites of potential community value to a new “Community Ownership” use class, which would have development rights. The sale of public land should end, and local authorities should have an increased role in site assembly and preparation.

Other potential reforms to the planning system are proposed including reforms to compulsory purchase legislation to allow public authorities to acquire land at near use value and use new Compulsory Sale Orders (“CSOs”) to direct that land be sold by public auction to the highest bidder. Office to residential permitted development rights should be removed and a new D3 (public realm) Use Class, granting rights of access for civic and cultural purposes, should be a requirement for all new developments incorporating open space (this would be alongside a new urban right to roam).

We will continue to monitor any further developments, but if you would like any more detail on the contents of the report now, please contact us.

Authors: Jane McMenemy, Kate Wilson and Fiona Sawyer, professional support lawyers, real estate and planning, London

For further information please contact:

Jeremy Walden
Jeremy Walden
Partner and head of UK and EMEA real estate practice, London
+44 20 7466 2198
Matthew White
Matthew White
Partner and head of UK planning practice, London
+44 20 7466 2461

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In our blog post of 10 December 2018 (see here), we discussed the potential impact on developers and landlords of changes to permitted development (PD) rights and Use Class A which were being consulted on by the government. Despite widespread criticism, and counter to some calls for a greater role for local authorities in securing the futures of their town centres through holistic town planning, in a Written Statement on 13 March 2019 James Brokenshire announced that the government is implementing the majority of the proposals. Some of the changes to PD rights are to be made later this spring; other changes, such as upward extensions for residential use, will be dealt with in further regulations in the autumn. We were also told that we can expect an Accelerated Planning Green Paper later this year. Whilst the changes are intended to “[simplify and speed up] the planning system, to support the high street, make effective use of land and deliver more homes”, whether this can be achieved by these changes remains to be seen. This post discusses what the changes are, and what their impact could be within the context of wider change. Continue reading

Proposed changes to permitted development rights and use classes – impact on developers and landlords

Two key themes of the Budget on 29 October 2018 were increasing the supply of housing and improving the health of high streets and town centres. Published with the Budget was the consultation ‘Planning reform: supporting the high street and increasing the delivery of new homes’. Also announced was the government’s ‘Open Doors’ project, aiming to help improve the vitality of town centres by facilitating meanwhile use of vacant units. The ‘Planning reform’ consultation closes on 14 January 2019. A call for applications from landlords who wish to pilot the Open Doors project closes on 31 December 2018. We have prepared a briefing for clients, summarising key proposals that will be of interest to retail landlords, developers and advisers and assessing how these might impact new or existing developments and the lettings of these assets.

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