Community land auctions and how the pilot works

A community land auction is a land value capture mechanism in which landowners tell the local planning authority, in advance and in binding form, the price at which they would sell their land if it were allocated in the local plan. The authority weighs those offers alongside the usual planning tests when deciding what to allocate, and captures the difference between the offered price and the value of the allocated land. The power sits in Part 5 of the Levelling-up and Regeneration Act 2023 and is framed as a time limited pilot.

This note is written as at September 2026. The arrangements depend on commencement and on regulations that designate participating authorities and set the detail, so check the current position on legislation.gov.uk before advising anyone. The planning law timeline is a reasonable place to follow it.

What the mechanism is trying to do

Land value uplift on allocation is the largest single gain in the development process, and the existing tools capture it indirectly. Section 106 obligations mitigate the impact of a specific scheme. The Community Infrastructure Levy charges a rate per square metre set by a charging schedule. Neither is calibrated to what a particular field is actually worth once it is allocated.

A community land auction attacks the problem at the point of allocation rather than at the point of permission. The landowner names a price. The authority knows what the land costs before it decides to allocate it. And the authority, rather than the landowner or a promoter, takes the uplift.

The theory is elegant. Whether it works depends on how landowners behave when their offer influences whether they get allocated at all.

How landowners bid options into the process

The mechanism runs on options. A landowner grants the authority a binding option to require the sale of the land, at a price the landowner sets, exercisable if the land is allocated in the plan.

That creates a reverse auction dynamic. A low offer improves the chance of allocation and reduces the landowner's return. A high offer protects the return and reduces the chance of being chosen over a neighbouring site. The landowner is bidding against other landowners for a place in the plan.

Three practical problems follow for anyone holding land.

Existing agreements come first. A promotion agreement or an option held by a developer will almost certainly restrict the landowner's ability to grant a further option, so the CLA option needs the existing holder's consent and probably a renegotiation of the split.

Pricing is a one shot decision. Unlike a normal negotiation there is no second round, and the offer is made before the plan is examined, which means before anyone knows whether the allocation survives.

And the tax treatment of an option premium and a subsequent disposal needs advice from someone who does tax for a living, because the structure differs from a conventional sale.

What the authority does with the value

Receipts from the arrangements are directed to infrastructure, with the Act requiring that a proportion is spent on infrastructure and allowing a share to be applied more widely to other functions of the authority. The detail of the proportions and the definitions sits in regulations.

That is a significant difference from the levy in practice, because a CLA receipt arrives as a capital sum at the point of disposal rather than as instalments as development comes forward. An authority that allocates well could fund a school or a link road early. An authority that misjudges the market could find itself holding options over land no one wants to build on.

Allocation decisions must still be plan led. The Act does not permit an authority to allocate land because the money is good if the site is otherwise unsuitable, and a plan that did so would be vulnerable at examination. Financial benefit is a new consideration in plan making, not a substitute for the existing ones.

Interaction with the levy and with section 106

Site specific mitigation does not disappear. A development still generates the need for a junction improvement, a play space or an affordable housing contribution, and section 106 obligations remain the route for securing those where they meet the statutory tests.

How CLA receipts sit alongside the levy is dealt with in the Act and the regulations that follow it. Do not assume that land within CLA arrangements is treated the same way as other land for levy purposes, and do not assume it is treated differently either. Check.

For a developer appraising an allocated site, the practical question is what the total policy cost is: the price payable to the authority, the levy or its successor, the section 106 package and the affordable housing requirement. That calculation belongs in a viability assessment prepared to the RICS professional statement, and councils usually expect a suitably qualified author.

What it does to land promotion strategy

The promotion model depends on a promoter taking planning risk in exchange for a share of the uplift. A community land auction takes part of that uplift away at source, so promoters facing CLA arrangements will price the risk differently or decline to promote at all in that area.

Landowners with several parcels face a portfolio question. Offering one parcel at a keen price may get it allocated while suppressing the value of the rest. Offering nothing keeps the options open and risks the authority allocating a competitor's land instead.

Strategic land agreements written before 2023 rarely contemplate any of this. If you hold land under an old promotion agreement in an authority that may pilot the mechanism, read the agreement now rather than after a call for sites.

The same instinct applies to other land instruments created by recent legislation. Conservation covenants under the Environment Act 2021, which we cover in conservation covenants and what they bind, can also sit on title for decades and constrain what a later owner can do.

Which authorities are involved, and what to do now

Participation is not automatic. Authorities have to be designated for the pilot through regulations, and the arrangements only run in connection with a plan that the authority is preparing.

So there is no list to rely on in an article, and anyone who offers you one should be asked where it came from. The reliable sources are the Act itself, the regulations made under it, and the authority's own local development scheme and call for sites documentation.

Three things are worth doing while the position settles.

1. Audit your land agreements for restrictions on granting options and for change of law provisions.
2. Watch the local development scheme of every authority where you hold or promote land, because a call for sites is the moment the mechanism would bite.
3. Keep your appraisal model flexible enough to test an allocation price as an input rather than an output.

Nothing here is a reason to change a strategy today. It is a reason to know which authorities are preparing plans and when.

This is general guidance, not legal advice. Check the position with your local planning authority or a qualified professional before relying on it.

For the evidence base that supports a site promotion, browse the 66 report types by category. PlanScope provides AI-assisted draft reports for planning applications. Reports should be reviewed before submission. We do not guarantee planning approval.