Land is the only commodity that can’t be physically transported when exchanged. Hence the myriad different forms of land ownership, and its often outrageous cost.
That outrageous cost underpins much of what is wrong with modern British society: the housing crisis, our lack of public amenities, the gulf between rich and poor, the privatisation of recreation and leisure services.
Two new reports propose innovative solutions, which the Labour Party should consider carefully as part of its plan for government.
Shelter’s Grounds for Change: The Case for Land Reform in Modern England is a collection of essays addressing land reform so as to bring down land prices and build the social housebuilding we desperately need.
One radical proposal shines through: abolish or drastically reduce “hope value.” When public authorities use compulsory purchase powers to buy land, they are required to pay not just the market value but also “hope value” reflecting the increased value of the land if planning permission for residential use were granted (even though there is no such permission).
The government estimates that the grant of residential planning permission increases the value of the land on the open market by around 108-120 times: a huge amount.
“Hope value” compensates the seller for the loss of that chance, with some reduction allowing for the possibility that planning permission might not be granted.
Removing or substantially capping hope value would allow local authorities to buy land themselves, build houses on it, open up green spaces or sell part of it to developers, thereby keeping the profit gained from residential planning permission in the public purse, to be spent on infrastructure.
Land for the Many: Changing the Way our Fundamental Asset is Used, Owned and Governed is a collective work by seven specialists, edited by George Monbiot and presented to the Labour Party for consideration.
It starts with transparency. Guy Shrubsole’s useful book and website Who Owns England? tells us that half of England is owned by just 1 per cent of the population.
The authors point out that to obtain accurate data from the Land Registry costs £3 per search, a trivial amount until you realise that 24 million titles are registered and so searching the whole database would cost £72 million.
That information should be freely available, along with details of any public subsidy given for land purchases and fully available S106 and CIL agreements (conditions attached to planning permission for developers to provide affordable homes or infrastructure) so that we know when developers break their promises.
Transparency is a good start, but the real goal is stabilisation of house and land prices. The report proposes a Common Ground Trust, to provide common and shared ownership between prospective buyers and the public sector, helping first-time buyers (unlike the government’s Help to Buy scheme which simply drove up house prices and where 42 per cent of recipients could have afforded to buy anyway).
An ambitious programme of social housing building and rent controls and security in tenure in the private rented sector would provide alternatives to home ownership, so help to curb house price inflation.
And progressive taxation could discourage the current financialisation of the housing market, whereby house price inflation is seen as providing an investment or an inheritance.
The report proposes increases in council tax on the most expensive homes, capital gains increases on second homes and investment properties, and a lifetime gifts tax so that those who inherit or receive over £125,000 from family wealth pay tax.
The report welcomes Labour’s existing plans for an English Sovereign Land Trust, so that development can be led by the public interest rather than private developers chasing maximum profits (which results in developers choosing to build expensive homes, rather than houses the local community needs, or keeping land empty so as to benefit from land price inflation).
It also suggests public development corporations, which would build on public land or purchase land without paying inflated “hope value.”
Public participation in planning could involve a jury system, randomly selected local people to participate in designing local and neighbourhood plans.
Finally, different forms of community ownership are welcomed: co-operatives, self-build groups and mutual schemes as well as local authority housebuilding.
I am not qualified to comment on its proposals for farming and forestry, particularly post-Brexit. But I most welcome the chapter on extending the commons.
We may have the right to roam, but it only applies to about 10 per cent of land in England and Wales, landowners can subvert it by neglecting public rights of way and 2026 is the cut-off point for registering rights of way.
In towns and cities, too much apparently public space is actually privately owned. The owners permit the public to walk across their squares or admire their fountains, but can also bar us and accuse us of trespass.
In 2011, the Occupy Movement had planned to occupy Paternoster Square, opposite the London Stock Exchange, but were thwarted as the square is privately owned, and the owners obtained an injunction.
Instead Occupy camped next door in St Paul’s churchyard. We should have an assumed right of public access across all uncultivated land and waterways except for gardens and certain exceptions (perhaps to protect sensitive wildlife sites), and in urban and suburban spaces.
Recognising today’s common good, the report proposes that councils should be required to provide parks and other green spaces and that waiting times for allotments should be no more than one year. A recommendation that will please Jeremy Corbyn.
Land for the Many is radical, but complementary to Labour’s existing policies: on social housebuilding, reforming the planning system for the public good, the green industrial revolution, sharing out the tax burden, so that those who inherit or receive unearned wealth pay their fair share, at a similar marginal rate to income tax, and measures to clamp down on tax avoidance.
We just need a Labour government — sooner rather than later — to to implement it.
Liz Davies is a housing rights barrister, a member of Southampton Test Labour Party and an honorary vice-president of the Haldane Society of Socialist Lawyers. She writes this column in a personal capacity.
Liz Davies is a Labour Party activist and housing rights barrister. Member of Southampton Test CLP and Unite the Union. Previously secretary for Hackney North CLP (2017–2018). Co-author Housing Allocation and Homelessness law and practice (Luba, Davies, Johnston and Buchanan, 2018, LexisNexis) and Honorary Vice-President of the Haldane Society of Socialist Lawyers. Her professional profile is here. She cannot respond to queries about legal cases through this website.Read full bio