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Impact of changes to the Planning System on Land Values in London

This research project demonstrated that interpretation of recent changes to the planning system has had a significant negative impact on affordable housing provision in London, through unintentionally inflating land values.

The study, commissioned by 13 London Boroughs and funded by Islington Council, reports that since April 2009 the surge in London house prices, together with a raft of new national planning measures intended to stimulate house building in the wake of the 2008 financial crisis, has led to a rise in residential land values of nearly 150 percent, but has not significantly boosted the delivery of new affordable homes as hoped.

A central part of the planning process, reinforced by the National Planning Policy Framework introduced in 2012, is the requirement for the assessment of economic viability of residential developments. The research revealed key flaws in this viability testing system, particularly in relation to the way that land is valued and found that these were a major cause of reduced affordable housing delivery.

Research Team: Sarah Sayce, Neil Crosby, Peter Garside (Kingston University), Rob Harris (Ramidus Consulting), Ali Parsa (Royal Agricultural University)