Chancellor to consider raid on landowners’ sale profits

LANDOWNERS could be stripped of large portions of their profits from selling sites, under proposals expected to be unveiled in the Budget.

An official review commissioned by Philip Hammond, the Chancellor, is understood to endorse controversial calls for the state to “capture” more of the increase in value of sites when they are granted planning permission.

Sir Oliver Letwin, the former minister carrying out the review, is expected to say that councils should be able to seize greater amounts of landowners’ profits to fund the construction of local infrastructure.

“He has alighted on the fact that landowners are making more money than they should,” said a source familiar with Sir Oliver’s work.

Downing Street and the Treasury are now in discussions over how radical an approach to adopt.

Sir Oliver’s report could go as far as recommending compulsory purchase at prices that exclude the “uplift” in value from planning permission. But some fear this would be toxic among traditional Conservative supporters.

Mr Hammond is planning to set out Sir Oliver’s proposals in the Budget on October 29, although he is likely to fall short of formally adopting any ideas until they are further scrutinised.

Sir Oliver’s report comes amid growing calls from MPs, charities and thinktanks for the state to claw back more of the increase in value that landowners gain from planning permission.

Developers claim it would be a “wholesale erosion of private property rights” and insist that existing mechanisms already allow councils to extract money for local infrastructure.