That £1.6 million scrap of park

I love this little story.

When the London Borough of Wandsworth refused planning permission to build on the site, Greenweb served a purchase notice compelling the council to buy the land because it would not allow it to be used for any commercial purpose.

The current market value of the land, as a public open space, was independently set at £15,000, but Greenweb's legal team invoked an obscure clause in the Land Compensation Act 1961 which gives automatic planning permission for the rebuilding of houses destroyed by German bombs.

That meant the value of the land suddenly shot up to £1.6m, even though the council would never allow it to be developed.

There's so many intertwining strands here.

OK, so a bombed out terrace was incorporated into a public park after the war. There's a law on the books which says that there is automatic planning permission for bombed out sites. When the current owners of that private property came along and said they wanted planning permission on the land the council refused.

Now that is very much a taking. It's the taking of private property by the local council firstly for that incorporation into the park. Secondly, for not granting the planning permission that they are duty bound to give. And thus, given that this is land with a right to planning permission, they have to pay the higher price for it. Or, of course, they could grant the planning permission and not have to pay the money.

Lord Justice John Thomas said it was "highly regrettable" that taxpayers in Wandsworth had to fund the purchase of the land for more than 100 times its true value, while Lord Justice Stanley Burnton said he upheld the law "most reluctantly".

Umm, no My Lord. Wandsworth taxpayers are being forced to pay the market value of the land at £1.6 million, as they should when they try to take someone else's property.

I take two further lessons from this. Firstly, that we are still a country, however imperfectly, ruled by the law, for which great thanks. Secondly, we see here the reason for high house prices. It isn't the lack of land, it's not that we are a crowded island. It's that planning permission itself makes housing expensive. £15,000 worth of land is worth £1.6 million just because the State says you can build on it. If we liberalised the rules that define where you may and may not build then house prices would come tumbling down.