False claims that landowners make billions of pounds of profit from selling land with planning permission are distorting the view of how the value of land is captured, according to the CLA.

A new report by the Centre for Progressive Policy and the National Housing Federation published this week claims landowners are making billions of pounds of profit every year for getting planning permission on their land, raising prices and making it difficult to build new affordable homes.

The CLA which represents landowners, farmers and rural businesses in England and Wales has challenged the claim.

CLA Director of Policy and Advice Christopher Price said: “These figures do not present an accurate view of the price land is sold for, nor do they accurately reflect the extent to which the state already captures the increased value of residential land compared to agricultural land.

“Government data on land values that underpin the assumptions in the report itself states the figures ‘may be significantly higher than could reasonably be obtained for land in the actual market’ and strongly recommends the figures are used only for policy appraisal.

“It is clear that we need to build more houses. We are keen to be part of the debate to help solve the housing crisis but it requires looking at a range of measures rather than a quick fix.

“While there is an uplift in the value of the land, the current system already captures a high proportion of this value to fund affordable housing, GP surgeries, schools and other infrastructure. These planning obligations are a pre-requisite to any development going ahead and exist to mitigate the impact of development. The Government has recently taken steps to ensure developers contribute fully to these obligations.

“The current system achieves an equilibrium which ensures landowners are incentivised to sell land, that developers build and social infrastructure like affordable homes and schools are catered for.

“We are concerned that using these misleading figures as the basis to extract further value will break this equilibrium and stall land coming on to the market, holding back the delivery of all types of homes.”