New reforms take effect to support local councils to build more affordable housing

New reforms have come into force that will make it cheaper and easier for local councils to buy land to build more affordable housing.

Changes coming into effect will allow councils to purchase land through Compulsory Purchase Orders without needing to pay ‘hope value’ costs. ‘Hope value’ estimates the cost land could be worth if it was developed on in the future, meaning councils potentially pay more to buy land for housing, with disputes and negotiations over costs risking delaying developments.

The new measures in the Levelling-up & Regeneration Act 2023 allows Homes England, councils and other bodies to apply to the Secretary of State to remove hope value in certain circumstances where Compulsory Purchase Orders are being used. The changes aim to make it cheaper and easier for councils to regenerate communities by building new homes.

Levelling Up Minister Jacob Young said:

“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, commented:

“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.”