Hope versus housing

I say surprising because we could still be 18 months away from a general election, and one might have expected Labour leader Sir Keir Starmer to have kept the more colourful cards closer to his chest.

Clearing a path to building on green-belt land is not what you might call a bland suggestion. But perhaps airing this idea early gives Labour a chance to test the water, with the potential for a change of bathing suit before it takes the plunge in its manifesto.

Similarly, this week’s news that the party is planning to reform compulsory purchase orders (CPOs), in a bid to cut the cost of new homes, feels like it might be a case of running up a flag to see if there’s a breeze or a gale.

Making land for new houses cheaper is clearly less divisive for the voting public at large. But the policy is going to feel pretty raw to anyone currently holding land that might get wrenched out of their hands in the future.

If the outline leaked to the FT is accurate, Labour aims to scrap ‘hope value’ payments made to owners forced to sell through CPOs. These payments compensate for the loss of potential value through redevelopment – typically through imagined schemes that are nowhere near fruition. If a sketch of a scheme for a lucrative building is deemed to be at least 51% likely to gain approval, the authority making the purchase has to compensate for this theoretical loss.

Labour’s proposal to scrap such payments does not come out of the blue. This is an area of policy that the current government has already been prodding at with interest. Last summer, it ran a consultation around changes to CPO compensation in England and Wales. In its response, published on 27 April this year, it revealed that it had received a very mixed bag of opinions as to whether altering the rules – to either cap or scrap hope payments – would be a good or a bad thing for housing supply, levelling up and regeneration.

True to form, the government acknowledged the varying views before confirming that it would aim to push through one of the least popular options on the table – giving the secretary of state at the Department for Levelling Up, Housing and Communities the power to waive hope payments, in the public interest, when petitioned by a local authority.

This idea is unpopular primarily because it digs a big black hole of uncertainty right under the CPO process – leaving landowners and local authorities alike uncertain about whether schemes will or won’t be viable until very late in the day.

The government has said it will limit the new veto to CPO schemes supporting affordable housing, education or healthcare facilities.

Labour’s floated proposal, to scrap the payments altogether, does have the virtue of simplicity. However, if the very varied responses to last summer’s consultation are any guide, that doesn’t necessarily make it a good idea.