The government should let councils buy land, grant it planning permission and then sell it off to help solve the UK's housing crisis, according to a report by think tank Adam Smith Institute (ASI) released today.
The president of the think tank and the report’s author Madsen Pirie said that devolving power to local councils could help yield £30bn to pay for public services.
One of the estimates the study cited showed that an acre of land was worth £2,500 without planning permission and £4m with it.
"By granting permission to land they own, councils can capture the monetary benefits for themselves and their residents," the ASI said.
Sam Bowman, executive director at the Adam Smith Institute, added:
Right now, if you own a field that gets planning permission, you could stand to gain one or two hundred times in value what the field was originally worth. That massive uplift is called “planning gain” and the fact that local communities mostly don’t capture it is one reason they oppose new development so much – they only stand to lose from new houses being built near them.
We need to change that. Not only would a system like the one we’re proposing make house building much easier in the places it’s needed most, it would create a large and lucrative source of revenue for local government. That would truly be a win/win for everyone: more houses, more money for locals, and less of a drain on central government which can redirect some of the money saved to other areas.