Labour prepares to limit landowners’ gains from sale of green belt land amid push for new homes

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The government is preparing to limit the amount landowners can receive from selling green belt land, handing councils the power to cheaply buy up land that previously would have been ineligible for development as part of its plan to tackle the housing crisis.

In areas with the greatest housing need, landowners could also find themselves penalised for refusing to sell land. Councils would be able to force them to sell land at a “benchmark” value – which would be lower than the market value of similar sites outside the green belt.

The measures come during concern that in areas of high property prices, such as around London and the South East, landowners could cash in on sites which previously had low development value.

To address this, ministers are consulting on plans to set a “benchmark” value for the land that would put a limit on the amount that landowners could charge.

Such plans would form part of the government’s intention to overhaul the planning system and build 1.5 million new homes by 2030 to tackle the housing crisis.

Mandatory housing targets, scrapped by the previous Conservative government, would also be restored, while some local authorities will be required to allow the building of homes on green belt land to meet the targets.

If landowners and local councils fail to agree on a price, sources told The Times, ministers are looking at how local authorities, along with Homes England, could use compulsory purchase powers to acquire the land.

Announcing a major overhaul of the planning system in July, deputy prime minister Angela Rayner told MPs that “we must all play our part” in the plan to build more homes.

Speaking in the Commons, she warned the country is facing the “most acute housing crisis in living memory”, claiming that the number of new homes is set to drop below 200,000 this year.

The overall annual housing target for the UK will increase to 370,000, replacing the previous Tory government’s advisory target of 300,000 homes per year.

A Ministry of Housing, Communities and Local Government representative said: “We will reform the outdated compulsory purchase process to remove inflated values of land and ensure compensation paid to landowners is fair but not excessive.

“We will preserve the green belt and take a brownfield-first approach in doing so, so sites which people are desperate to see used will be developed first. We will also use lower quality ‘grey belt’ land, like wasteland or old car parks, and introduce ‘golden rules’ to ensure that development benefits both communities and nature.”