It is time to look again at these proposals. At the Labour Party conference in September 2022 Starmer said he wants to accelerate house building. He also admitted their plans, to stop private firms from delaying the start of development will be opposed by Conservative MP’s. “None of this will be easy-it won’t be like flicking a switch. It will mean tough battles on issues like planning and regulation”.
This is confrontational policy making. It will fail. As it has in the past. Why? Because legitimate expectations of land owners, speculators and their teams of advisers will be torn up. In particular the value of their assets will be destroyed.
It may stick in the throat of idealistic Labour supporters, but if they want realistic housing delivery policies they must adopt long term policies. Which means their policies must be fully inoculated against the electoral U-turn.
Why are long term policies crucial to win the support of the property market players? Because there is a fatal disease they must block. It is called hope value. To prevent hope value attaching to land, their spatial policies changes must not take effect sooner than 10/20 years ahead. Obviously this sounds politically unrealistic. It is not, which may surprise.
Provided Labour and Conservative party planning reforms are based on a long term consensus, the property market will fall into line. The value of their assets 15 years or more ahead are no longer impacted by the expectations which create hope value. In other words local councils can go and buy land in the open market at existing use values. Owners will not be financially disadvantaged. Even if their land is subject to compulsory purchase they will receive open market value. Claims of unfair treatment will be dismissed as valuers will demonstrate this is not the case.
In the meantime, land owners and speculators holding land back from the market place know the future trend in land values will be downwards, as a new supply of official building land, ready to build is on the horizon. How will they respond. By releasing land, fast.
Success lies in using the market, not fighting it.
Ian Campbell
25 February 2023
