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Land-banking is preventing local authorities from driving forward development

Land-banking is preventing local authorities from driving forward development
4 min read

Keir Starmer’s PPS Emma Hardy MP writes on the topic of land-banking ahead of the introduction of her Ten Minute Rule Bill. 

My home city of Hull is suffering from a particularly egregious example of what amounts to historical and cultural vandalism and it was this situation that prompted my interest in “land-banking”. While this proposed bill will help situations where buildings are being neglected it also addresses the wider problem local authorities face when attempting to drive forward development on sites where the landowner is unwilling and/or unable to bring forward a scheme.

Hull is a growing, successful city that is attracting significant investment and undergoing really positive change. The council has already granted numerous housing, commercial, industrial and educational permissions, the majority of which have been implemented and are taking other vital steps to secure our future.

My recent debate in Westminster Hall was about Hull’s Bid to become Yorkshire’s Maritime City. They will have heard me talk about the proud place that the sea plays in the history of Hull and how, for years, the shipping and deep-sea trawling industries dominated our economy and their buildings stood prominently along our skyline.

This country has a long recognised through legislation that the worth of buildings extends beyond the a simple financial one and into areas of historical, architectural and cultural importance. Most recently through the Planning (Listed Buildings and Conservation Areas) Act 1990 and The Enterprise and Regulatory Reform Act (ERRA) which give extra protections to selected buildings with regards to planning permissions. Further protection is given by the compulsory purchase system, which gives powers to Local authorities, the Secretary of State and Historic England (in Greater London) to compulsorily acquire a listed building for its long-term preservation.

However, our current system of compulsory purchase leaves a number of ways a property developer can avoid compulsory purchase while leaving the site undeveloped and any buildings to slowly deteriorate. It is this situation that my bill seeks to address. 

Its main proposed provisions are as follows.

It would enhance Compulsory Purchase Powers where planning permission has not been implemented in full within 5 years. These powers would enable a local authority or other relevant body to acquire the site, if it commences development within 12 months of the acquisition and that at least 50% of the development is completed within 3 years.

Secondly, it would introduce Compulsory Sale Orders that can be utilised by councils under the same conditions. These compulsory sale orders would give local authorities the power to order that a piece of land that met the required conditions be put up for an open auction.  

Related to this, the Bill makes provision for the introduction of completion notices and for changes in what it means for a developer to make a material start to a property. This is done to prevent a developer effectively just digging a hole and claiming that work has begun. 

These two new powers would allow for a common-sense system for the transfer of ownership of buildings in a productive way and would prevent anyone being able to sit on a building of cultural or historical significance and run it down. The proposals would also give local authorities a choice and allow cash strapped councils to free land and buildings from abusive ownership while properly compensating the owner. 

However, we must consider what we mean by proper compensation and my bill contains two provisions to address this matter: 

The first establishes the rate of proper compensation to be that given in the Planning (Affordable Housing and Land Compensation) Bill 2017-19. This provision sets the value of land compensation not at the aspirational value as it currently stands in law, which allows developers to gain an unjustifiable level of compensation, but at the much more sensible current value plus 15%. 

Secondly, it would require a discount in the compensation where a notice has been issued under section 215 of the Town and Country Planning Act 1990. 

I believe we should also look at removing VAT for any conversion works to properties in Heritage Action Zones and introduce new pots of money, to be administered by Homes England and available to local authorities, to unlock these pieces of land. 

Emma Hardy is PPS to Shadow Secretary of State for Exiting the European Union Keir Starmer and MP for Kingston upon Hull West and Hessle.

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