I welcome a change to what is a broken system.
Private developers and housebuilders are not best placed to deliver affordable housing and most recognise this, either selling off plots or working with RSLs as a delivery partner.
The agreement of a ‘non-negotiable’ set levy would reduce last-minute, multi-party negotiations on both infrastructure and affordable housing, creating greater certainty for local authorities. Furthermore, assuming if the levy is based on final sales values, greater land value uplift could be captured for local authorities.
The challenge for some local authorities will be their ability to deliver affordable housing. Years of under-funding have resulted in the considerable reduction of their technical planning and architecture teams. Where appropriately located municipal land is in short supply, it will be necessary for councils to bid against private sector housebuilders. And the creation of new council housing estates will end the aspiration of ‘pepper-potting’: consideration must be given to how the ‘ghettos’ of the 1970s can be avoided.
Success requires cross-party support, to avoid landowners simply waiting for a change of Government before bringing forward land for development (in the belief that the legislation may be repealed, and a higher land price secured). It requires the level of taxation to be set at a rate which raises necessary funds without stymying the speculative land market and requires the necessary skills within local authorities.
It is yet to be confirmed whether the new levy would be imposed at a standard rate. This seems unlikely because of the range in land values across the country, but the determination of the levy at a local level would be a considerable burden and could result in an inconsistent delivery of new homes.
The major benefit of such a change is to untangle developers from the lengthy negotiations currently faced and deliver more certainty to local authorities – but there is a lot of detail to work through before this can be achieved.
