In England a public body that wants land for a scheme can issue a compulsory purchase order. By 2023 the argument was over hope value, the premium land carries when someone expects it to win planning permission.
What an order looks like in practice
The London Development Agency, the mayor’s business arm, issued one for a 345 hectare site in Stratford, east London, to clear the way for the Olympic Park. The site held some private housing and more than 270 businesses. Many firms around Marshgate Lane told the BBC they were being forced out.
The order did not end the talking. Manny Lewis, the agency’s chief executive, said it would much prefer voluntary agreements with businesses and landowners, and that negotiations would go on. He promised 9,000 new homes as part of the legacy.
For some owners, money was not the point. Lance Forman, whose family runs a salmon smokery there, said his firm wanted an equally good site with the same access to the City and the West End, not compensation. He asked what regenerating the area was for if it destroyed 300 good businesses and 10,000 jobs.
Why hope value matters
Hope value can dwarf the land’s present worth. A 2018 analysis by the Centre for Progressive Policy, cited by the Guardian, found that planning permission raised the price of farmland 275 times, from £22,520 to £6.2m a hectare.
Politicians in both main parties have argued for years that compulsory purchase should not pay it. In a 2018 report for the think tank Onward, the Conservative MP Neil O’Brien called the practice “highly questionable”. He said it had made the old new towns model too costly and complex to work.
Who decides
In May 2023, Michael Gove’s department planned to let the housing secretary decide, case by case, whether to strip hope value out of an order. Its spokesperson said the secretary of state would decide whether an order could be approved at all. The change sat in the Levelling-up and Regeneration Bill, then before the House of Lords.
Labour wanted to go further. The Guardian reported that the party planned a law letting local development authorities buy land under compulsory purchase without paying hope value. Labour argued that leaving the call to a minister would expose that minister to lobbying from landowners.
