Compulsory Purchase – the Budget and the Letwin Report

Even by the standards of most lawyers, Compulsory Purchase Orders (CPOs) are technical and complex. The relevant law is fragmented across numerous Statutes, and is then further layered with additional regulations and guidance. 

The historic appetite for CPOs shows that their use goes in cycles – sometimes popular, sometimes not. Well CPOs are coming back into vogue, driven by a desire to build new homes, and by a raft of new legislation including the Housing and Planning Act 2016 and the Neighbourhood Planning Act 2017. 

Further evidence that the rise of the CPO is firmly on the Government’s agenda is provided by the proposals in the Letwin Report – the output of a review panel looking at improving the build out rate of planning permissions.

The recent budget on 29 October included reference to the Letwin Report (which was released on the same day). One of the key long-term boosts to build out rates is the proposal to give local authorities statutory powers to compulsorily purchase the land designated for large sites (over 1,500 units) at prices which reflect the value of those sites once they have planning permission, but at a hugely reduced residual development value (due to diversity rules in the Report).

The Government has promised to respond to the Letwin Report by February 2019. However, we suspect that the adoption of these proposals is likely to be very dependent on the way that the economic wind is blowing in February. If the economy needs a Brexit-related boost then the view could be taken that the opening up of some new large scale developments might just be the boost that the economy needs?
In the meantime the prospect of statutorily enforced maximum land values is something that will be keeping landowners awake at night. 

For more information on this topic please contact Mark Howard.