Compulsory purchase of farmland: a legal guide for UK farmers
Compulsory purchase orders allow local authorities and other bodies to buy land without seeking the owner's consent. Find out how this can affect farmers.
If you own farmland in the UK, you naturally want to hold on to it – or, at least, sell it on your own terms.
Compulsory purchase orders (CPOs) challenge this. They allow public authorities to buy your land without your consent.
This can include houses and other buildings on the land – and can sometimes affect tenant
farmers as well as landowners.
CPOs are usually issued by local authorities – but they can also be served by infrastructure projects. HS2, for instance, has the legal power to issue CPOs. Private actors like utility companies can also claim land.
They tend to be issued as part of major infrastructure projects like airport expansions, housing development, power lines, water mines and road improvements.
It's a complicated area of law, especially when it comes to calculating compensation. And while the official line is that 90% of the sale value should be paid upfront, some farmers have found themselves in limbo.
For this reason, it can be advisable to seek legal advice early on. An experienced
agriculture lawyer will be able to advise you about the process and weigh up whether you have any valid grounds for objection. They can also fight your corner at a public local inquiry.
What can farmers do?
CPOs can be challenged – but you should always get legal advice before embarking on a challenge to make sure you have a valid case.
Before a draft CPO is issued, the local authority (LA) or other body has to publish a notice in the local newspaper for two successive weeks. This gives landowners a 21-day period in which they can object.
If you miss this window, your chances of success are reduced – so it's important to keep your ear to the ground.
As Andrew Shirley, chief surveyor at Country Land and Business Association has
said: "Farmers must make the time to see what's going on, especially at LA level. The sooner they can get in there, the easier it is to get things changed and minimise the effect on their business."
Whatever happens, it's better to be forewarned and forearmed than to miss the announcement and find yourself without options.
How is compensation calculated?
Like many forms of compensation, the way that CPO compensation is calculated is complex but built on a simple principle: the principle of equivalence.
This means the
landowner should end up neither better nor worse off than before the CPO. It takes into account the land's market value as well as its potential for future planning permissions, "severance" (where a farm is split into plots) and "injurious affection" (disruption caused by the construction process).
This principle of equivalence has its critics. Jeremy Moody of the Central Association of Agricultural Valuers, for instance, has said that "its inbuilt downward pressure on price encourages resistance, delay and extra costs for projects".
It's for this reason that former Chancellor of the Exchequer George Osborne proposed changes – and that Labour are saying they will reform CPO payments if they come into power at the next general election.
What rights do landowners have?
Landowners who feel that the LA or other body has acted unlawfully can take disputes to the Upper Tribunal Lands Chamber, where their case will be judged by specialist agriculture lawyers.
It's not an easy fight to win – so it's important that you get good quality legal advice early on.
If the land is purchased and is no longer needed, certain bodies need to offer to sell it back to the former owner. This falls under the so-called "Crichel Down rules" – named after land in Dorset that was bought by the Air Ministry in 1938 for use as a bombing range.
What are the Labour Party's proposals?
In June 2023, Labour announced that if it gets into government at the next general election it will overturn the 1961 Land Compensation Act. This is a piece of legislation that stops local authorities from buying plots for development at their agricultural value. Instead, they have to consider the value that might be accrued in the future.
Labour's proposals would mean that landowners served a CPO would have no choice but to sell at below market value.
Why? The proposed legislation forms part of Labour's "Levelling Up and Regeneration Bill". Its aim is to free up land for house-building.
Advocates say that this would bring England's land valuation mechanism in line with Germany, France and the Netherlands and enable local authorities to tackle the housing crisis. Meanwhile, critics say that a "two-tier" market – where there's one price for land sold on the open market and another for CPOs – could create confusion.
The proposals are in stark contrast to George Osborne's suggestion that landowners should be paid
more in order to speed up housing development.
Either way, as the
Financial Times points out, the proposed move is "likely to anger some landowners, especially those with fields suitable for development".
How we can help
Compulsory purchase and compensation legislation is extremely complex. It's not something that can be navigated without expert legal guidance – partly because different rules apply to different purchasing authorities.
If you find yourself faced with a CPO, your priority will be to receive fair compensation – and this is something that an agriculture lawyer can help you with.
Above all, you need a legal partner who will dig into the details, manage surveys and valuations and get your business the best possible deal at a stressful time.
At Milners, we have a tight-knit team of specialist
agricultural lawyers. We have a proven track record of success and pride ourselves on our ability to resolve complex legal issues quickly without any sacrifice of detail.
Partner with us and you'll have expert legal advice at your fingertips so that you can get on with running your business.
Are you looking for legal advice relating to a compulsory purchase order?
Get in touch today for a free, no-obligation consultation.
![Judgment has been handed down this week in Transwaste Recycling and Aggregates Ltd [2024] EWHC 330 (](https://lirp.cdn-website.com/8f80b851/dms3rep/multi/opt/o+and+s-1920w.JPG)
Authorised and regulated by the SRA, SRA ID 52317