Labour plans to use compulsory purchase orders to force landowners to sell plots at substantially lower market prices to force down housebuilding costs in England if they win the next election. 

Under proposals being drawn up by party officials, a future Labour government would introduce legislation allowing local authorities to use CPOs to buy land at a price that does not reflect the value of potential planning permissions, according to a report in the Financial Times. 

CPOs allow public bodies to force property owners to sell deemed essential for new homes or critical infrastructure. 

This would overturn parts of the 1961 Land Compensation Act, which prevents local councils from buying land for development at its agricultural value. 

Currently, agricultural land bought by local authorities through a CPO must factor in hope value, which is the added value based on the expectation that the plot will win planning permission in future. 

Land worth £22,520 per hectare as agricultural land can jump 275 times to £6.2m per hectare with planning permission, according to think-tank Centre for Progressive Policy. 

“We want to tilt the balance of power,” a Labour aide told the newspaper. 

“It feels like the scales are tilted towards landowners, we want to re-tilt it towards the communities that want to see more houses built.” 

In April, the government announced new powers allowing the levelling-up secretary Michael Gove to limit or suspend hope value compensation payments, on a scheme-by-scheme basis. This is an amendment to the levelling-up and regeneration bill, currently making its way through parliament.  

A spokesman for the The Department for Levelling Up, Housing and Communities said: “It will ultimately be for the secretary of state to decide whether a compulsory purchase order can be approved and if the removal of hope value is appropriate.” 

Labour and the government clashed earlier this month over housing when Conservative Prime Minister Rishi Sunak pledged to protect the green belt against new homes, following calls by opposition leader Keir Starmer, for these sites to be built on “where appropriate” to make housing more affordable.    

Last November, Gove bowed to pressure from Conservative backbench MPs to drop a mandatory target to build 300,000 new homes every year, instead making it advisory. 

New towns in the 1940s and 1950s — such as Welwyn Garden City, Basildon and Hemel Hempstead — were built after development corporations bought large tracts of land at agricultural value. These schemes were built to provide homes for around 50,000 people in each case.