A committee of cross-party MPs is to look into how land value capture policies can contribute to the delivery of the government’s house building plans.
Such polices capture the uplift in value on land when it is granted planning permission.
The Housing, Communities and Local Government (HCLG) committee will consider possible reforms to the current system of developer contributions towards affordable housing and infrastructure.
It will also examine the government’s plans to reform compulsory purchase compensation rules and how increases in land value may be captured more effectively for public good.
Elsewhere it will look at how land value capture (LVC) mechanisms could be improved or reformed to operate with the government’s planning reform agenda, including the delivery of new towns and the release of grey belt land for development.
The inquiry will also explore whether alternative mechanisms may be more suitable and how value could be realised across regions in England which have lower average land values.
The effectiveness of existing methods, such as the Community Infrastructure Levy (CIL) and planning obligations under Section 106 of the Town and Country Planning Act 1990 are likely to be on the agenda for discussion as is reform of compulsory purchase orders.
Public evidence sessions are expected to begin in March 2025.
Sheldon Bosley Knight associate director and head of planning and architecture, Natasha Blackmore da Silva welcomed the launch of the inquiry.
She said: “The inquiry into land value capture is a timely and essential step in addressing the challenges of housing delivery in the UK.
“The current system of developer contributions, through Section 106 agreements and the Community Infrastructure Levy (CIL), is complex and often slows down the delivery of much-needed housing.
“Reforms that streamline land value capture could provide a more predictable and equitable framework, ensuring the viability of development projects.
“This inquiry represents a chance to create a more efficient system that is easier to navigate, guaranteeing timely delivery of housing.”
Committee chair Florence Eshalomi MP said getting its policies right would make a valuable contribution to funding affordable housing and investing in public infrastructure, such as GP surgeries, and schools.
She said: “We are in the middle of the housing crisis and the cost of land is one of the main reasons house prices are rising so rapidly.
“Currently, landowners can make significant profits from the substantial increases in land value when local authorities grant planning permission.
“We need a land value capture system which is fair and that helps to deliver what communities need – affordable housing and public services which people can rely on.”
