Note: The following are proposals to the Labour Party, which will consider these as part of its policy development process in advance of the next general election.
Please find a Spanish translation here: Resumen de Recomendaciones
All information about land ownership, control, subsidies and planning should be published as open data. There should be free and open access to information on who owns land, including the identities of the beneficial owners (Chapter 2).
There should be a fully public register of charges and options over land titles, and public databases of the prices paid for all property and of public subsidies paid on land. Land should be registered with the Land Registry as a prerequisite for receiving subsidies.
Local Authority Asset Registers and sales should be published as open data. There should also be a full register of planning permissions, including developers’ commitments.
The Land Registry and Ordnance Survey should return to being executive agencies of government. A portion of the Land Registry’s £530 million in cash reserves should be used to help fund initiatives proposed in this paper.
Land price stabilisation
We recommend that a Labour government should set an explicit goal to stabilise house prices, so that wages can catch up and the house price-to-income ratio can gradually fall. As the problem of house price inflation is, at root, a problem of residential land price inflation, this is also a goal to stabilise land prices.
The measures listed below would discourage land and housing from being treated as financial assets, encourage banks to redirect lending into productive sectors, and encourage a more efficient use of the existing housing stock (Chapter 3). Together, these policies would bring an end to house price inflation.
To prevent these long-overdue reforms from triggering an unduly sharp reversal in land values, we float an innovative and radical solution called the Common Ground Trust (Chapter 4).
One function of the Common Ground Trust is as a non-profit institution that helps prospective buyers purchase homes. At their request, it will buy the land underlying a house, making the upfront deposit for home ownership much more affordable. In return, the buyers pay a land rent to the Trust. By bringing land into common ownership, land rents can be socialised rather than flowing to private landlords and banks.
This function ensures that the Common Ground Trust supports demand from ordinary buyers in the housing market. Debt-fuelled and speculative demand can then be reined in without the risk of an uncontrolled or destabilising fall in values. As such, the Trust is an enabler for the broader package of reforms set out below.
Ending the buy-to-let frenzy
We recommend major reforms of the private rented sector (Chapter 3). For example, tenancies should be open-ended, and landlords should lose their power to evict a tenant who has not broken the terms of the tenancy agreement for the first three years of the tenancy agreement, and should have to provide grounds for eviction after that point. There should be a cap on annual permissible rent increases, at no more than the rate of wage inflation or consumer price inflation (whichever is lower). We propose that buy-to-let mortgages should be more firmly regulated and restricted.
We also support Labour’s commitment to an ambitious social housing building programme, and suggest changes to the system of land assembly (see below) to facilitate this goal.
The Bank of England should use credit guidance and other macroprudential tools to encourage a shift in bank lending away from real estate, and towards more strategically useful sectors of the economy (Chapter 3). Once house prices are stabilised, and the house price-to-income ratio starts to fall, the maximum loan-to-income and loan-to-value ratios should be tightened, to prevent any future debt-fuelled reinflation of house prices. Supplementary measures will be needed to prevent this from disproportionately affecting the less well-off.
Progressive and efficient tax reform
To discourage the use of homes as financial assets, reduce the tax paid by the majority of households, and encourage more efficient use of the housing stock, we recommend that a Labour government should replace the council tax with a progressive property tax (Chapter 3). This should be payable by owners, not tenants. The valuation of properties for tax purposes should be updated annually, and empty homes and second homes should automatically be taxed at a higher rate. We also recommend a surcharge for all properties owned by those who are not resident in the UK for tax purposes.
Stamp Duty Land Tax should be phased out for those buying homes to live in themselves, and capital gains tax for second homes and investment properties should be increased. We recommend that inheritance tax should be abolished, and replaced with a lifetime gifts tax levied on the recipient.
Business rates should be replaced with a Land Value Tax, calculated on the basis of the rental value of local commercial land.
To ensure that farmland is reserved for farmers and to prevent it from being used for tax avoidance and speculation we propose that a new English Land Commission undertakes a review of tax exemptions given to landowners. This should aim to restrain these fiscal privileges without harming family farms. The removal of similar tax exemptions on woodlands and forestry should also be considered.
In the interests of transparency, and to ensure that land is not used for financial speculation, tax avoidance or money laundering, we recommend an Offshore Company Property Tax payable by companies based, or beneficially owned, in secrecy jurisdictions (Chapter 3). We also recommend an increase in the Annual Enveloped Property Tax and a removal of the exemption for properties under £500,000.
Development and planning
Development should be led by democratically-accountable public bodies and communities, not private developers operating according to the need to maximise shareholder returns. Labour has set out plans for an English Sovereign Land Trust, that could work with local authorities to advance this process. (Chapter 5)
New Public Development Corporations should be given the power to purchase, develop and sell land in the public interest for the creation of new towns and other communities. Their construction contracts would give priority to local small- and medium-sized firms, ensuring that builders compete on quality rather than on their ability to navigate the speculative land market.
The Development Corporations should be able to obtain long-term, low-cost loans from the Labour’s proposed Regional Development Banks.
We recommend that the Land Compensation Act is reformed to enable development corporations and other public authorities to acquire land at prices closer to its current use value, rather than its potential future residential value. This could reduce the cost of building genuinely affordable housing by up to 50% (Chapter 5).
Local authorities should also be empowered to lead local development. They should set housing targets based on the type, size and tenure that local people need and can afford.
The planning system should be reformed to address imbalances of power, which currently allow deep-pocketed developers excessive influence over local decision-making. Among the measures we recommend are permitting local authorities to set and vary planning fees: for example, increasing them for applications raised more than once, or when advice or policy has been ignored (Chapter 5).
We propose that a Labour government should remove permitted development rights that allow office and agricultural buildings to be turned into housing without full permission.
The sell-off of public land to the highest bidder should end. Local authorities and other parts of Government should use the land they own to deliver high quality affordable housing and meet other key social needs.
We call for a formal review of participation in planning, whose purpose is to ensure that communities are better able to co-create local policies and developments.
We recommend the creation of a Community Participation Agency to ensure that under-represented groups in particular are involved in the planning process and to secure the participation of citizens in plan making and major infrastructure planning.
We propose introducing a form of jury service for plan-making stages to facilitate broader participation.
Each local authority should appoint a Future Generations Champion to represent the interests of children and unborn generations in planning decisions and plan making. This will ensure that the long-term environmental implications of current decisions are taken into account.
We seek to enhance the opportunities for communities to design and co-create whole developments and housing estates.
Community ownership and control
To put communities at the heart of development, a Labour government should support the creation of Community Land Trusts and Community-Led Housing (Chapter 6).
To enhance the community ownership of land, we propose:
- Introducing a Community Right to Buy based on the Scottish model, in the other three nations of the United Kingdom.
- Introducing Compulsory Sale Orders, granting public authorities the power to require land that has been left vacant or derelict for a defined period to be sold by public auction. Community groups could be offered the right of first refusal and financial support to purchase this land.
- Devising new rules to facilitate community ownership and increasing the choice and scope of mortgages for community-led housing.
We propose an urban and suburban right to roam, codifying a citizen’s right to come onto land for civic and cultural purposes (Chapter 7). We also propose a new Public Realm use class: defining public space that citizens have the right to use for civic and cultural purposes. Allowing Public Realm use would be a planning requirement in all new developments with open space.
The provision of parks should become a statutory service for councils. Our proposed reforms to the Land Compensation Act 1961 will make it easier for councils to create new parks and urban green spaces.
A Labour government should amend the Allotments Act 1908 to introduce a time limit of one year for the mandatory provision of land for allotments, and to ensure that this land be situated within reasonable distance of plotholders’ homes.
National Planning Policy Guidance should be amended to make allotment provision and land for community food growing projects a key function of Green Belts, particularly near railway stations connecting to city centres.
Farming and the countryside
We propose to widen access to farming, by halting and reversing the sell-off of County Farms, and legislating for a ministerial lock on their disposal (Chapter 8). In suitable areas near cities, county farms should be broken up to create opportunities for small farmers, with tenancies offered at below-market rates.
We seek to encourage Community Land Trusts to buy rural land, for farming, forestry, conservation, rewilding and the protection of catchments. To this end, we propose creating a Community Land Fund, with a target of £200m of land in community ownership by 2030, financed by some of the £530m surplus accumulated by the Land Registry.
To meet the needs of land workers, agricultural ties on dwellings should be protected. There should be a clear policy route for new landworker dwellings on low impact farming operations. This could be a One Planet Development Policy, as is currently in force in Wales.
To democratise decision-making and arrest the rapid collapse of wildlife and ecosystems, we suggest that the English Land Commission be charged with investigating the possibility of extending the planning system to cover major farming and forestry decisions.
To help address our health crises and enhance our sense of belonging, we propose that the rest of the UK adopts the Scottish principle of a Right to Roam across all uncultivated land and water, excluding gardens and other exceptions.
To prevent the further loss of rights of way, we propose that Labour repeals the legislation limiting the protection of footpaths and bridleways.
Research and policy development
We call for bodies modelled on the Scottish Land Commission to be established in the rest of the United Kingdom. Their role should be to research ongoing issues involving the ownership, use and control of land, and to propose new policies.Next: Chapter 1: Introduction »