New Reforms for Councils to Build Affordable Housing

New Reforms for Councils to Build Affordable Housing

In a move to address the ongoing housing affordability crisis, the UK government has introduced reforms aimed at empowering.

These reforms aim to facilitate the construction of thousands of social and affordable homes by granting councils new powers to acquire land at more reasonable prices through Compulsory Purchase Orders (CPOs).

One of the key challenges councils have faced in acquiring land for housing projects is the inflated cost due to ‘hope value’.

This term refers to the potential future value of land if developed, often resulting in disputes and inflated prices.

The new reforms aim to alleviate this burden by removing ‘hope value’ under specific circumstances when CPOs are used, making land acquisition more cost-effective and efficient for councils.

Jacob Young, the Levelling Up Minister, emphasises the importance of these changes:
“Our changes will act as a catalyst for investment in our towns and cities and drive much needed regeneration in communities across the country.

“We know we need to build more homes and alongside our Long-Term Plan for Housing, these changes will help us do that, unlocking more sites for affordable and social housing, as well as supporting jobs and growing the economy.”

Kate Henderson, Chief Executive of the National Housing Federation, adds:
“Enabling local councils to buy cheaper land through Compulsory Purchase Orders without paying ‘hope value’ will allow them to build more of the desperately needed affordable homes the country needs, in the right places for the people who need it most.

“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.”

Under the Levelling-up & Regeneration Act 2023, bodies such as Homes England and councils can apply to remove ‘hope value’ under certain conditions.

These conditions include developments being in the public interest and facilitating affordable or social housing, as well as health or educational uses. This legislative framework aims to empower councils while ensuring that developments align with broader societal goals.

The effectiveness of Compulsory Purchase Orders in facilitating development is evidenced by successful projects across the country.

For example, in Leicester, the regeneration of Waterside has revitalised derelict land, leading to the construction of new homes and commercial spaces. Similar success stories can be seen in Sheffield and Helmsley, where CPOs have overcome obstacles to housing development.

As councils navigate these new powers, careful planning and collaboration with stakeholders will be essential. While the removal of ‘hope value’ represents a significant step forward, it must be accompanied by strategic decision-making to ensure that housing initiatives meet the needs of local communities.

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