A new report suggests the key to solving the UK’s ongoing housing crisis is to give local councils more power to buy and sell land
The Adam Smith Institute has recommended the government give councils more sway if it wishes to solve the housing crisis.
The think tank made recommendations in a new report on how to overcome the shortage of affordable properties across the UK. One of the key recommendations called for the government to allow councils to buy land, grant planning permission on it and then sell it off.
Madsen Pirie, president of the institute and author of the report, said giving local authorities devolved power over housing provision in this way could potentially pay dividends. The report suggested that an acre of land is worth £2,500. With planning permission this figure increases to £4m. Selling land in this way could raise £30bn to pay for public services.
The ASI said: “By granting permission to land they own, councils can capture the monetary benefits for themselves and their residents.”
Delivering new homes
The housing crisis remains a key topic of discussion, with the government pressing ahead with plans to deliver new homes throughout this parliament. The Conservative government previously pledged to deliver one million new homes by 2020, but this has proved somewhat difficult to achieve and targets have been missed. However, the demand for affordable homes remains.
Sam Bowman, executive director at the Adam Smith Institute, said allowing local authorities to sell land with permission attached could have a significant impact.
He said: “Right now, if you own a field that gets planning permission, you could stand to gain one or two hundred times in value what the field was originally worth. That massive uplift is called “planning gain” and the fact that local communities mostly don’t capture it is one reason they oppose new development so much – they only stand to lose from new houses being built near them.
“We need to change that. Not only would a system like the one we’re proposing make house building much easier in the places it’s needed most, it would create a large and lucrative source of revenue for local government.
“That would truly be a win/win for everyone: more houses, more money for locals, and less of a drain on central government which can redirect some of the money saved to other areas.”
