Developer levies that help fund new towns and affordable housing should be boosted, MPs say.  

The housing committee’s latest report focuses on the current system of land value capture, which also helps to fund public services, such as a new doctor’s surgeries and schools. 

Land value capture consists of a range of measures that reflect price increases in privately-held land, particularly when public planning permission has been granted and new infrastructure provided.

The housing committee says that the government should push through a series of land capture reforms, including Section 106 agreements — between local planning authorities and developers — and the Community Infrastructure Levy, “to ensure developers make fair contributions towards community infrastructure and affordable housing, including homes for social rent”. 

It adds that such reforms are crucial to Labour meeting its target of building 1.5 million new homes before the next election. 

The report comes after the housing department last month named sites where it plans to build 12 English new towns that could add up to 300,000 homes.   

Housing secretary Steve Reed unveiled the list during his speech at the Labour Party conference in Liverpool, adding that building work at three sites — Tempsford in Bedfordshire, Crews Hill in London and Leeds South Bank — would begin before the next election.

But Housing, Communities and Local Government Committee chair Florence Eshalomi says: “We need more homes, but we need homes that are affordable.  

“Any proposed changes to land value capture measures, such as the Community Infrastructure Levy, should be able to answer the crucial question of how it will increase the number of affordable homes available, alongside vital infrastructure.” 

The MP’s report — Delivering 1.5 million new homes: Land Value Capture — also urges the government to publish its long-term housing strategy paper, which has “left industry in the dark, without a clear sense of the trajectory of housing supply, and without an overarching plan as to how such an ambitious target will be achieved”.

The housing department, in July 2024, pledged to publish these plans “in the coming months. 

MPs say the plans have still not been released and the government “has not confirmed when in 2025 it now expects the strategy to be published”. 

Eshalomi points out: “We are in a housing crisis, and I want to see the government bring forward the delayed long-term housing strategy to set out the comprehensive range of policies needed to address the slow pace of housing delivery and ensure 1.5 million homes are built in this Parliament.  

“The government must not lose sight of the need for the infrastructure which residents expect in high-quality new developments, and developers must continue to make a fair contribution towards this.” 

The report’s recommendations include:

• New template clauses for Section 106 agreements to focus negotiations on site-specific factors rather than legal wording 

• Reinstate access to funded Level 7 postgraduate-level, or degree-level, town planning apprenticeships for students over 21

• Establish a statutory dispute resolution scheme to settle deadlocked negotiations between local authorities and developers fairly 

• Publish updated land value estimates data, which have not been updated since August 2020, to inform future reforms to land value capture