“I’m just wondering if culturally, we have to do a lot more work around common good and I’m wondering whether that could be the crux and what this research might be about…”
- – Roundtable participant
Land is a precious but finite resource. The increasing competing demands for housing, infrastructure, biodiversity, access and well-being, as well as financing, oblige us to reconsider how we manage land. Balancing these trade-offs is key to unlocking economic, natural and social capital in England.
Labour’s new planning agenda raises questions about how we get the best “value” from land: between the grey belt/green belt debate, establishing a new towns task force, plans to use development to fund nature recovery, and various calls for a land-use framework, there is much to unpack. Indeed, it is estimated that over 40% of England’s land will undergo transformation in the next 15-25 years, raising essential questions about distributive justice.
Landowners are a key part of the land-use puzzle. The LSE landowners’ roundtable, hosted on 5 September 2024 as part of a wider Oram Fellowship project promoting a value-based approach to planning, aimed to determine how we might best facilitate landowners’ participation in value creation.
Landowners have distinct and varied interests, motivations, and values that affect how their land is managed. An open conversation amongst a diverse range of public, private and third sector landowners is an important first step in understanding how we might navigate key tensions surrounding land-use decisions in England. Our participants are based in the Greater London Area and the Wider South East, which has unique geospatial and socioeconomic challenges, but we hope that many of the findings will resonate with landowners further afield.
The roundtable gathered 17 landowners and landowning organisations, alongside 6 expert speakers to contextualise and inspire further conversation. It was chaired by Tony Mulhall of the Royal Institution of Chartered Surveyors (RICS) who asserted that land has many values, both complimentary and competing, often within the same plot. He insisted that the fundamental questions surrounding land’s value are not limited to the UK but span the globe as population growth puts pressure on this multifaceted resource.
The key tensions surrounding land as a resource
Richard Simmons of UCL’s Bartlett School of Planning, opened Session One by emphasising that the relationship between landowners and their land is key to creating value. Land value is determined by its utility: its inherent nature, and improvements made to it or the surrounding area. However, land value isn’t just about exchange; its symbolic, social, cultural, and environmental value, though less tangible, is equally important in land-use decisions.
When asked how they view their land as a resource, one private landowner observed that many rural landowners have had to rethink how they might generate value as farming no longer “pays”. There is now an opportunity for rural land to become a backdrop for numerous activities and functions, contributing more holistically to the local economy.
Community Land Trusts (CLTs) offer a new perspective, viewing land as a resource to be decommodified, better enabling affordable homeownership, which creates non-monetary value like health and happiness. Meanwhile, a housebuilder insisted that “it’s not all speculation or profit margins” but stressed that financial value is necessary to generate broader value for the community.
On the challenges of unlocking land value, there was an implication that “those invested in the land” should not be limited to shareholders. One participant proposed a move away from the question of “your land” towards the more inclusive notion of “our land”. However, several landowners underlined the dangers of NIMBYism in local politics.
The inevitability of hard choices was also highlighted given that land, particularly in urban areas, is “insufficient to meet the needs of all…”. This is all the more difficult as there is no mechanism for comparing different value concepts. In fact, certain participants questioned whether we could put a price on social value or biodiversity net gain. Indeed, it was noted that decisions between food security and biodiversity, affordable housing or social infrastructure cannot be collapsed into “an elegant optimisation exercise”. These decisions therefore come down to political decisions requiring tradeoffs.
Navigating the current system of land value capture (LVC) in the UK
In Session Two, Virginia Blackman from Avison Young outlined current LVC mechanisms and changes to Compulsory Purchase Order (CPO) rules allowing local authorities to disregard ‘hope value’ when acquiring land. She emphasised the requirement for significant resources in the planning system to facilitate this change. Anna Hart from Transport for London (TfL) highlighted the need for new funding sources due to grant cuts and mentioned the success of a hybrid LVC model using business rates, Community Infrastructure Levy (CIL), and Section 106 for TfL projects like the Northern Line and Crossrail. However, broader reforms, such as a land tax, suggested in their 2017 report, are unlikely in the current political climate.
Participants insisted that LVC allow for a range of values across the country and on different plots of land. The need to distinguish urban sites from greenfield sites was also underlined. Moreover, the increasing pressures put on sites to deliver a range of public benefits raised questions about whether projects can cover all costs without the support of general taxation.
One participant noted that value is created and redistributed by developers, but delays in using Section 106 and CIL contributions often lead to misunderstandings about the benefits of new developments. Another attendee argued that local authorities should take a more strategic approach to outlining contributions in local plans to maximise value. The need to reinvest resources and skills into local government for a more efficient and transparent LVC system was widely acknowledged.
Some participants also warned that landowners often bear the greatest costs, spending significant time and money promoting their land through the planning system, therefore expecting a certain level of return. They cautioned against excessive experimentation with land values in order to create the conditions for land trading, with a view that new CPO rules should remain the exception. As one housebuilder noted, “value is only captured if the site actually comes forward for development,” emphasising the need for flexibility to ensure returns for all stakeholders. A public-sector participant nevertheless interrogated what constitutes an acceptable profit margin.
Towards alternative land management futures
The third session drew inspiration from models in Denmark, France, the Netherlands, and UK projects like the London Docklands. Nicholas Falk of the URBED Trust highlighted the importance of public infrastructure investment for land value uplift. He proposed a model focused on land assembly and development around transport routes, along with property tax reform and greater access to bonds. He also emphasised three informal tools for effective land value sharing: ambition, brokerage, and continuity.
Oxford University Professor Patricia Canelas noted that LVC involves complex interactions among various stakeholders. Success, she argued, therefore depends on mobilising and reconciling their diverse interests. She urged a departure from viewing state and non-state actors as antagonistic to embrace broader, more progressive notions of value that go beyond price.
Participants acknowledged that the UK planning system is inherently conflictual but agreed that people and partnerships are key to overcoming challenges. One attendee stressed the need for “a complete change in relationships,” while another advocated for partnerships that are “deeply relational rather than transactional.”
There was consensus that all stakeholders—from large housebuilders to CLTs and private landowners—have a role to play. However, high costs and risk deter many landowners from pursuing legacy developments due to the complexity and unpredictability of the planning process. Calling for increased certainty, some participants recommended a long-term vision and the creation of a regional body for spatial planning, while others suggested letting the market lead instead of relying on short-term political cycles. Tax incentives were proposed to encourage private landowners to deliver high-quality developments, and early community involvement was highlighted as a strategy to mitigate risk and build long-term trust.
However, lenders’ skepticism that the planning system will deliver prevents CLTs and SMEs from securing funding, often hindering land acquisition or material sourcing. Long-term funding solutions, such as borrowing against land value through Development Corporations, were proposed by one participant to bridge this gap. It was also suggested that government-funded infrastructure or serviced sites could further derisk development. Another participant commented that this would unlock the value of land as serviced sites could then be sold to a range of stakeholders with different resources and capacities, allowing them to take on varying levels of risk and participate in value creation at different stages of the development cycle.
Next steps
The rich discussions recorded during the event will be further analysed along with data from two complimentary research workshops on housing delivery and community participation. The findings will allow our research team to propose progressive policy recommendations in an upcoming report on what a value-based approach to planning might look like and what it could achieve. The report launch is scheduled for January 2025.
_________________________
