Our housing correspondent, BARRATT HOLMES, on how a ‘very un-Conservative’ policy shift has probably come too late to save Croydon town centre
Ready for the bulldozers?: Croydon Council now has CPO powers that would allow it to buy the Whitgift Centre on the ‘cheap’
New powers handed to local authorities by the Conservative Government could, just, open the way for Croydon Council to reverse the continuing decline of the town centre by CPO-ing parts of the Whitgift Centre in order to turn much of the site into much-needed social housing.
If only Croydon had a couple of hundred million quid spare to conduct such a transformational scheme…
According to a report in the trade press, even the Tories’ multi-millionaire mates in the property development industry have turned on the lame-duck Government, accusing Michael Gove’s Department for Levelling Up, Housing and Communities of “desperation” in trying to find ways to turn round their “poor track record in delivering affordable homes”.
Gove’s DLUHC this week handed local councils new powers to buy land for development using compulsory purchase orders without paying inflated “hope value” costs – a notional uplift in price which has added millions to the bottom lines of land owners and property speculators for decades, mostly paid for by public money.
The move has been described by one figure in the property business as a “very un-Conservative departure”. Which probably makes it the right and obvious thing to do.
The new powers would apply to cash-strapped Croydon, although it seems unlikely that piss-poor Perry, the borough’s impotent executive mayor, will be splashing the cash to build council homes any time soon… Croydon’s Conservatives, who instigated the disastrous town centre regeneration plan with their friends in the Whitgift Foundation, are in any case thought unlikely to want to rock the boat over the long-postponed Westfield scheme.
Croydon Council has already CPO’d the Whitgift Centre and Centrale site once, almost 10 years ago, but on behalf of developers Westfield, going through the lengthy public inquiry process even without any opposition from the landowners. Since then, Westfield have sat on their hands and done nothing…
CPO-ing the Whitgift Centre now for what the site is actually worth, rather than having to pay some pie-in-the-sky, jam-tomorrow “hope value” estimate, would potentially wipe tens of millions off the price, and therefore make redevelopment much more viable. The last planning application submitted by Westfield included almost 1,000 flats in a mixed-use scheme.
Cunning plan: Michael Gove’s new CPO move has been called ‘un-Conservative’
Across the country, Gove’s cunning plan seeks to get round “hope value” estimates, which add theoretical, anticipated value based on what land could be worth if developed in the future. The DLUHC’s changes remove these additional costs “in certain circumstances” to make it cheaper and faster for councils to buy and develop land.
Labour promised last year to scrap “hope value” when they come to power, which according to a report in Property Week “were slammed by industry experts at the time”.
Now, it appears, some of the property “experts” have had a re-think.
Rico Wojtulewicz, head of housing and policy at the National Federation of Builders, was quoted as welcoming the reform, but saying that he didn’t ”see it as a solution to the housing crisis”.
“The greater impact will be exposing the failure of the planning system,” Wojtulewicz said. ”Local authorities aren’t going to use these powers, and if they do, it’ll be interesting to see how they manage the commercial realities of the planning system.”
Ian Fletcher, head of policy of the British Property Federation, told PW that CPOs were “highly contested already” and that “depriving landowners of hope value is likely to make CPOs even more contested”.
Equities analyst and consultant Alastair Stewart said it would “mark a radical, and arguably very un-Conservative, departure from the Land Compensation Act”, legislation that was introduced by Harold Macmillan.
Brian Berry, the chief executive of the Federation of Master Builders – so an organisation whose members might profit from the contracts awarded to develop these properly-priced sites – described the move as “the Tories taking Labour policy to rectify failures in their own policy to deliver homes”.
Berry said, “It just shows the desperation in many ways about how to find positive policy initiatives given the poor track record in delivering affordable homes.
“Will it depress prices at a time when, in many parts of the country, prices have fallen or are stagnant? Would that further lower house prices in the surrounding area?”
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