Doubts raised over proposals to scrap CPO hope value

The industry has voiced concerns over the government’s proposals to scrap hope value payments in compulsory purchases. A consultation on new rules for compulsory purchase compensation was launched this week by the Department for Levelling Up, Housing and Communities, with the stated aim of simplifying the system. However, there are aspects that focus heavily on lowering costs for local authorities. The consultation paper stated “there have been calls” to allow authorities “to acquire land at or closer to existing use value”. It said this “would enable more land value to be captured and invested for the public benefit in the schemes, for example ensuring the viability of a scheme that may otherwise not be able to come forward or to support greater levels of affordable housing or enhanced infrastructure improvements”. The British Property Federation has said it would not be in favour of the changes. “This is being talked about as though it is a simplification,” BPF policy director Ian Fletcher told EG. “But it is a far bigger deal than a mere technical issue.” Fletcher added: “Currently, CPOs are used sparingly, and that is as it should be. There are suggestions that the government wants to make it easier, but this would be a huge mistake. “There is a lot of value and income created in the development process, and once a place is established I’d far rather see a more collaborative process that encourages landowners to invest their land in return for some long-term sharing of value than a process that confiscates their land, with all the stress, time and legal challenges that involves.” Proposals to limit hope value were first put forward in a select committee report on land value capture in 2018. The Country Land and Business Association said such changes would be “iniquitous”, adding: “The effect would be to deprive the seller of an element of value that they would expect to receive if the sale was through the open market, purely because the sale is compulsory.” Fletcher added that the policy seemed a strange choice for a pro-business government: “We are getting a lot of conflicting signals. The chancellor says that the British respect for property is what is drawing investment here, but then they propose something like this.” The consultation will close on 19 July, after which the government intends to issue a response. To send feedback, e-mail piers.wehner@eg.co.uk or tweet @PiersWehner or @EGPropertyNews