Farmers to be forced to sell land at fraction of its value

The Countryside Alliance has spoken out over Government plans to force farmers to sell land for less than its potential value.

Landowners will be forced to sell fields for less than their potential value if they are seized to build new homes or hospitals, under measure in the Government’s Planning and Infrastructure Bill, reports the Daily Telegraph.

Councils will be given greater powers to acquire land through compulsory purchase orders, paying only its current value rather than what it could be worth if developed, as in the current system.

Landowners, including farmers, will have their fields bought at a small fraction of their potential value if identified by local authorities as necessary for new homes, hospitals or schools.

The plans will be seen as another attack on the rural economy from the Government, after last year’s Budget imposed 20 per cent inheritance tax on farmers.

Tim Bonner, of the Countryside Alliance, said:

“We have been supportive of many of the Government’s changes to planning policy, but giving councils more power to reduce the value of land is a step too far, especially in the context of such a challenging outlook for farmers and the inheritance tax fiasco.

“This is not about people blocking development, it’s about the state paying the market price for land. We need more houses and more economic development, but not at the cost of basic principles.”

Other measures in the Bill, which will be introduced to Parliament today, include paying households near new pylon £250 a year and making it harder for communities to block energy infrastructure such as onshore wind farms.

Labour, which is facing pressure to hit its ambitious house-building target of 1.5 million new homes by 2030, has changed the rules on compulsory purchase orders to deliver on a manifesto promise that landowners get “fair compensation rather than inflated prices”.

However, rural groups say the plans punish farmers, who will also face pressure to sell land to pay for inheritance tax changes that come in after April 2026.

“We urgently need more affordable housing, but pushing landowners into selling land isn’t the answer,” Gavin Lane, deputy vice-president of the Country Land and Business Association, said.

Currently, Land seized under compulsory purchase orders is bought for the “hope value”: the potential value of the land if it had planning permission. Powers for some public authorities to remove hope values were provided in the Levelling up and Regeneration Act 2023, but they required sign-off by a minister.

The new Bill will make it easier for planning inspectors, councils or mayors to ignore the hope value when seeking a compulsory purchase. It will also make it easier for local authorities to remove hope value for compulsory purchase orders made on behalf of parish, town or community councils. If a piece of land already has planning permission, the council will have to pay the higher value.

In its consultation on the changes last year, the Government said it was “concerned there is a significant amount of suitable land available for housing which is currently lying vacant or underutilised and not coming forward for development”.

The Government insisted that the existing public interest test that must be applied to any compulsory purchase was robust and would stop the powers being used too widely. Landowners can object to a compulsory purchase order, on the grounds of procedural errors or an unreasonable decision, but the process often involves a lengthy legal battle.

Labour has been repeatedly accused of launching an attack on the countryside over its family farm inheritance raid, as well as plans to ban trail hunting and changes to gun licensing laws.

Angela Rayner said: “The Planning and Infrastructure Bill will unleash seismic reforms to help builders get shovels in the ground quicker to build more homes, and the vital infrastructure we need.”