The Big Question on… land: Should we strengthen the common interest in land and building ownership?

As the economy grows, as settlements expand and infrastructure is built, so the market value of land and property swells.  The widespread perception that home-ownership is ‘safe as houses’, backed by surges of credit, adds pressure. As demand for development land has grown, the differences between the prices paid for land with different use rights have widened. Britain’s 1947 Planning Act established the principle that private owners could enjoy the value of their property in its current use but needed permission to develop it or change its use.

After 65 years this principle has been much diluted, leaving the UK in an impossible situation —unable to meet its needs for housing and good settlements, unable to fund necessary infrastructure, unable to reconfigure old buildings and settlements to meet environmental imperatives.  This is paradoxical —and unnecessary given the unprecedented profits and capital gains being made from land and property.

A powerful change would be to revert to the rule that, when land is compulsorily purchased for development, the seller’s entitlement is only to its value in its existing use, or a price close to that. This would prevent sellers of land capturing most of the uplift in value, which could and should be paying for infrastructure, services and high environmental standards.

A second essential change would be a reform of property taxation, replacing council tax and business rates with a carefully-designed new system which would be continuously progressive and kept up-to-date. Such an improved kind of tax would collect property value uplift automatically as well as ending the injustices of the present systems.

The third strand of necessary land reform would be to strengthen the powers and financial resources which local communities have to acquire land and buildings for common and collective uses and projects—ranging from allotment gardens to care homes and housing—to be managed by non-profit trusts.

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These issues are considered at length in my report Prospects for land, rent and housing in UK cities commissioned as part of the Government Office for Science’s Future of Cities project. Publication has been deferred until June because of the UK parliamentary election.

Michael Edwards, Bartlett School of Planning, UCL  @michaellondonsf

Five Radical Ideas for a Better Planning System 

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