Compulsory Purchase specialist and Regeneration Director, David Conboy, reflects on the CPO consultation as it comes to an end this week, asking the crucial question:will removing hope value from compulsory purchase compensation truly accelerate housing delivery and boost affordability?
Governments have longed been focused on capturing development value seemingly on the founding belief that it is the planning system which creates additional value rather than market conditions. The next chapter is the exclusion of hope value (this being the value of land, above its existing use value, based on its potential for alternative uses such as the prospect of securing planning permission for residential development in the future) on all brownfield and allocated development land where it is compulsory purchased, with this seen as being a route to accelerate housing delivery and boost affordable housing supply.
While this approach aims to make land acquisition cheaper for public bodies through limiting compensation to Existing Use Value, our review suggests that these changes alone will not be sufficient to meet housing targets and could introduce new challenges for landowners, developers, and local authorities.
Key Proposals in the consultation on reforms to the Compulsory Purchase Process and Compensation System
1. Standardising the removal of Hope Value
- Extends the power to remove hope value from compensation calculations to more bodies.
- Allows inspectors to decide if hope value should be excluded.
- Ensures compensation is consistently calculated when hope value is removed.
2. Changes to compensation payments
- Reduces statutory loss payments to investor landlords.
- Increases payments for owner-occupiers and displaced residents.
3. Abolishing Hope Value for the following types of land
- Brownfield land in built-up areas, suitable for housing, but without planning permission.
- Allocated land for housing in an adopted local plan but not yet come forward for development.
4. Administrative reforms
- Allows compulsory purchase orders (CPOs) to be served electronically (with landowner consent).
- Aims to provide cost certainty for acquiring authorities and reduce legal disputes.
#OurSteer on the Government’s justifications
1. Removing Hope Value will deliver more Affordable Housing
Our Steer: Simply reducing land compensation costs does not guarantee more housing. Viability issues including rising build costs, finance costs, and planning delays are major barriers to development.
2. Will provide upfront cost certainty for CPO schemes
Our Steer: While excluding hope value simplifies cost calculations, market fluctuations and compensation disputes will still create uncertainty. A faster CPO process would be a more effective way to provide cost certainty.
3. Will reduce disputes over compensation:
Our Steer: The removal of hope value may actually increase disputes, as landowners will challenge acquisitions more aggressively to secure fair market compensation.
4. Aligns with fair compensation principles
Our Steer: The principle of compulsory purchase has always been to ensure landowners receive fair market value. If land has clear development potential, it should be reflected in the compensation.
5. Targets underutilised land to speed up development
Our Steer: Some land remains undeveloped not because of landowner speculation, but due to planning restrictions, infrastructure constraints or financial viability concerns. Addressing these challenges is key to unlocking sites for development.
Potential consequences of the reforms
| Positive | Negative |
| Lower land acquisition costs for public bodies, making affordable housing projects more feasible. | Increased resistance to compulsory purchase – Landowners will fight acquisitions harder if hope value is removed. |
| Stronger incentives for landowners to bring forward development sooner to avoid compulsory purchase at EUV. | Potential slow-down in land promotion – Landowners may be discouraged from securing site allocations in local plans if their land can later be acquired at EUV. |
| Risk of delays and legal challenges – More objections and court battles could slow down housing delivery rather than speed it up. | |
| Unfair financial impact on landowners – Those who invest in site promotion and planning risk losing out on development gains. |
The exclusion of Hope Value brought in by the Levelling-Up and Regeneration Act 2023 raised concerns about the principles of landowners receiving fair compensation being eroded, this did allow for a public interest case to be established to warrant the exclusion of hope value. The new proposals remove this test, creating a blanket position that all compulsory purchased Brownfield and Allocated land would receive compensation on the basis of existing use value alone. While the Government’s aim of increasing housing supply is commendable, removing hope value across all brownfield and allocated land through compulsory purchase is too blunt an approach. Instead, we would advise more balanced policy is needed, such as:
- A case-by-case assessment of whether hope value should be excluded.
- A benchmark land value model, ensuring fair compensation while avoiding excessive claims.
- Faster planning and CPO processes to reduce delays and uncertainty.
- Greater financial and technical support for local authorities to acquire and develop land effectively.
Without broader reforms to planning, funding, and infrastructure, this change alone will not be enough to unlock the stalled housing supply and could introduce new risks to the system.
To find out more or to discuss a project, get in touch with David Conboy.