Guidance

Purchase notices

Guidance on the purchase notice process.

• From: Ministry of Housing, Communities and Local Government
• Published: 3 October 2024

Applies to England

Purchase notices are the process by which owners can require a local authority to acquire their land where, as a result of a planning decision, it has become incapable of reasonably beneficial use. This guidance explains the circumstances in which they may be used and the process to follow.

Service of a purchase notice

1. What are the statutory provisions for the service of a purchase notice?

1.1 A purchase notice may be based upon:

• a refusal or conditional grant of planning permission or listed building consent
• a revocation or modification order; or
• a discontinuance, alteration or removal order

The statutory provisions enabling the service of a purchase notice are in section 137 of the Town and Country Planning Act 1990 and section 32 of the Planning (Listed Buildings and Conservation Areas) Act 1990.

1.2 The service of a purchase notice may not be based upon:

• a failure of the local planning authority to give notice of their decision on an application for planning permission (or listed building consent) within the requisite period
• a refusal of an application for approval of details or of reserved matters; or
• a refusal of an application for express consent for an advertisement display

2. What is the time for service of a purchase notice?

2.1 The time for service of a purchase notice is 12 months from the date of:

• the relevant decision for notices served under section 137 of the Town and Country Planning Act 1990 and section 32 of the Planning (Listed Buildings and Conservation Areas) Act 1990
• the Secretary of State’s confirmation of the relevant order under section 137 of the Town and Country Planning Act 1990

2.2 The date is provided by regulation 12 of the Town and Country Planning General Regulations 1992 and regulation 9 of the Planning (Listed Buildings and Conservation Areas) Regulations 1990.

2.3 The Secretary of State has power to extend this time limit and is normally prepared to do so where the service of a notice is delayed for good reasons. Councils have no power to extend the period for the service of a purchase notice.

3. Who should a purchase notice be served on?

3.1 A purchase notice must be served on the council of the district or London borough in which the land is situated. It cannot be served on a county council or government department.

4. What form should a purchase notice take?

4.1 There is no official form required for a purchase notice. A letter addressed to the council is enough if it:

• states that the relevant conditions in section 137 of the Town and Country Planning Act 1990 are fulfilled
• requires the council to purchase the interest(s) in the land, giving the names of the owners
• refers to the relevant planning application and decision
• identifies accurately the land concerned by reference to a plan
• provides the name and address of the owners

It should, if possible, be signed by the owners and state that it is a purchase notice.

5. Who can serve a purchase notice?

5.1 A purchase notice may be served only by an ‘owner’ of the land, as defined in section 336(1) of the Town and Country Planning Act 1990. That means a person, at the time of service of the purchase notice, other than a mortgagee not in possession, who, whether in their own right or as trustee for any other person, is entitled to receive the rack rent of the land or, where the land is not let at a rack rent, would be so entitled if it were so let.

5.2 The only exception is under section 137(2)(b) of the Town and Country Planning Act 1990 where in relation to a discontinuance notice under section 102 of the Town and Country Planning Act 1990 any person entitled to an interest in land in respect of which the order is made can serve a purchase notice.

6. Is there a right to amend a purchase notice once served?

6.1 It has been established that there is no right to amend a purchase notice once served, although an owner can serve more than one notice.

Effect of a purchase notice

7. What is the effect of a purchase notice?

7.1. A purchase notice does not require the council to purchase the land, unless (a) they state a willingness to comply with it, (b) it is confirmed by the Secretary of State or (c) it is deemed to have been confirmed under section 143 of the Town and Country Planning Act 1990. It is also possible that the council will find another authority or body willing to comply with the purchase notice in their place, or that the Secretary of State will confirm the notice on an alternative authority.

8. What happens where a purchase is accepted by the council or confirmed by the Secretary of State?

8.1 Where a purchase is accepted by the council or confirmed by the Secretary of State the council is deemed to have compulsory purchase powers and to have served notice to treat, so the price to be paid for the land is determined as if it were being compulsorily acquired.

Land which can be included in a purchase notice

9. What land can be included in a purchase notice?

9.1 Except in the case of a listed building purchase notice (see below), the land to which a purchase notice relates must be the identical area of land which was the subject of the relevant decision or order. If the notice relates to more land, it is invalid.

10. Can a purchase notice be served in relation to Crown land?

10.1 Land owned by the Crown is covered by separate provisions in section 137A of the Town and Country Planning Act 1990 and section 32A of the Planning (Listed Buildings and Conservation Areas) Act 1990. A purchase notice may only be served in relation to Crown land in limited circumstances.

11. Can a purchase notice cover parcels of land in different ownership?

11.1 Where land comprises parcels in different ownerships, the owners of those parcels may combine to serve a purchase notice relating to their separate interests, provided that the notice relates to the whole of the land covered by the planning decision or the order.

11.2 Where there is more than one site, each the subject of a separate planning decision or order, a separate purchase notice should be served for each individual site.

11.3 For listed buildings, section 32(1) of the Planning (Listed Buildings and Conservation Areas) Act 1990 applies to the building and any land comprising the building, or contiguous or adjacent to it, and owned with it, where the use of the land is substantially inseparable from that of the building, such that it ought to be treated, together with the building, as a single holding. The relevant application site and the listed building purchase notice site need not necessarily be identical.

12. Is the land ‘incapable of ‘reasonably beneficial use’?

12.1. The question to be considered in every case is whether the land in its existing state, taking into account operations and uses for which planning permission (or listed building consent) is not required, is ‘incapable of reasonably beneficial use’. The onus is on the person serving the notice to show this.

12.2 The potential of the land is to be taken into account rather than just its existing state, including if it is necessary to undertake work to realise that potential.

12.3 No account is taken of any prospective use which would involve the carrying out of development other than any development specified in paragraph 1 or 2 of Schedule 3 to the Town and Country Planning Act 1990 (development not constituting new development) or, in the case of a purchase notice served in consequence of a refusal or conditional grant of planning permission, if it would contravene the condition set out in Schedule 10 to the Town and Country Planning Act 1990 (amount of gross floor space).

12.4 In the case of a listed building purchase notice, no account is taken of any prospective use of the land which would involve the carrying out of new development or of any works which require listed building consent, other than works for which the local planning authority or the Secretary of State have undertaken to grant such consent.

12.5 In considering what capacity for use the land has, relevant factors include the physical state of the land, its size, shape and surroundings, and the general pattern of land uses in the area. A use of relatively low value may be regarded as reasonably beneficial if such a use is common for similar land in the vicinity.

12.6 It may sometimes be possible for an area of land to be rendered capable of reasonably beneficial use by being used in conjunction with neighbouring or adjoining land, provided that a sufficient interest in that land is held by the person serving the notice, or by a prospective owner of the purchase notice land. Whether it is or not would depend on the circumstances of the case. Use by a prospective owner cannot be taken into account unless there is a reasonably firm indication that there is in fact a prospective owner of the purchase notice site.

12.7 Profit may be a useful comparison in certain circumstances, but the absence of profit (however calculated) is not necessarily material. The concept of reasonably beneficial use is not synonymous with profit.

12.8 Where the use of land would mean it had some marketable value the land would be capable of reasonably beneficial use. Any reasonably beneficial use would suffice.

12.9 In determining whether the land has become incapable of reasonably beneficial use in its existing state, it may be relevant, where appropriate, to consider the difference (if any) between the annual value of the land in its existing state and the annual value of the land if development of a class specified in Schedule 3 to the Town and Country Planning Act 1990 were carried out on the land. Development of any such class must not be taken into account.

12.10 The remedy by way of a purchase notice is not intended to be available where the owner shows merely that the full development value of the relevant land is unable to be realised.

12.11 For the purposes of section 137(3)(c) of the Town and Country Planning Act 1990 or section 32(2)(c) of the Planning (Listed Buildings and Conservation Areas) Act 1990, any permission (or consent) granted, or deemed to be granted, and undertakings given up to the date of the Secretary of State’s determination of the purchase notice, may be taken into account.

12.12 To be capable of being taken into account, an undertaking should be in unequivocal language, and so worded as to be binding on the local planning authority. The Secretary of State would not regard a promise ‘to give favourable consideration’ to an application for permission to develop, as a binding undertaking. If no undertaking has been given, and the council consider that development of a kind not included in the original application ought to be permitted, and that the carrying out of such development would render the land capable of reasonably beneficial use, their proper course is to suggest that the Secretary of State should issue a direction under section 141(3) of the Town and Country Planning Act 1990 or section 35(5) of the Planning (Listed Buildings and Conservation Areas) Act 1990.

13. How will the Secretary of State satisfy themself that the land is ‘incapable of reasonably beneficial use’?

13.1 The Secretary of State considers that, in seeking to satisfy themself whether conditions (a) to (c) in section 137(3) of the Town and Country Planning Act 1990 have been fulfilled, they may take into account, among other things, whether there is a reasonable prospect of the server selling or letting the land for any purpose, were its availability to be made known locally. They would normally expect to see some evidence to show that the person serving the notice has attempted to dispose of their interest in the land before they could be satisfied that the land had become incapable of reasonably beneficial use. This evidence is helpful to assist in demonstrating that there is no reasonably beneficial use for the land. Attempts to dispose of the interest should be reasonable and proportionate.

13.2 Where an owner of land claims that their land has become incapable of reasonably beneficial use, they are regarded as making that claim in respect of the whole of the land in question. Therefore, if a part of the land is found to be capable of reasonably beneficial use, the condition in section 137(3)(a) will not be fulfilled in respect of the whole of the land.

13.3 In section 137(3)(a) of the Town and Country Planning Act 1990 the phrase ‘has become’ is taken to mean ‘is’ in the context of purchase notices. The Secretary of State is only required to consider whether the land is incapable of reasonably beneficial use in its existing state. They are not required to compare the present state of the land with its state at some earlier time, since there is no period for comparison laid down within the provisions of the act. The only circumstances in which the Secretary of State would be concerned with what brought about the existing state of the land are where that state is due to activities having been carried out on it in breach of planning or listed building control.

13.4 When considering whether a listed building has reasonably beneficial use, a relevant factor to be taken into account may be the estimated cost of any renovations believed to be necessary. It is therefore helpful (but not conclusive) if estimated figures for such renovations, and an indication of the likely return on the relevant expenditure, can be provided. If no reasonable person would undertake the works because the benefits would not outweigh the costs then the building would not have a reasonably beneficial use.

The council’s role

14. What should the council on whom notice is served do?

14.1 The council should first consider the validity of the notice. An invalid notice should not be sent to the Secretary of State. Instead, the council should inform the person serving the notice that in their view, for reasons stated, the purchase notice is invalid and they do not propose to take any further action on it.

14.2 If the purchase notice appears valid, the council should consider whether the conditions in section 137(3) of the Town and Country Planning Act 1990 or section 32(3) of the Planning (Listed Buildings and Conservation Areas) Act 1990 are satisfied. If the council regard the purchase notice as valid they must serve a counter-notice within 3 months from the date of service of the purchase notice (section 139(2) of the Town and Country Planning Act 1990 or section 33(2) of the Planning (Listed Buildings and Conservation Areas) Act 1990).

15. What should the council do if they conclude the land has become incapable of reasonably beneficial use?

15.1 If the council conclude that the land has become incapable of reasonably beneficial use in its existing state, they may properly accept the purchase notice. If so, the council must serve, on the owner by whom the purchase notice was served, a response notice stating that they are willing to comply with the purchase notice (section 139(1)(a) of the Town and Country Planning Act 1990 or section 33(1)(a) of the Planning (Listed Buildings and Conservation Areas) Act 1990).

15.2 If the council intend to seek a contribution from government under section 305 of the Town and Country Planning Act 1990 it is advisable to consult the relevant department at once and in any case before a response notice is served.

16. Can another local authority or a statutory undertaker comply with the notice instead?

16.1 Another local authority or a statutory undertaker may be willing to comply with the notice in place of the council on which it is served, for example because permission to develop the land was refused because it was required for their purposes. If so, the council should serve a notice to that effect on the owner by whom the purchase notice was served, giving the name of the other authority or body concerned (section 139(1)(a) of the Town and Country Planning Act 1990 or section 33(1)(a) of the Planning (Listed Buildings and Conservation Areas) Act 1990).

16.2 That other authority or body will then be deemed to have served notice to treat on the owner concerned.

16.3 The advice given in ‘What should the council do if they conclude the land has become incapable of reasonably beneficial use?’ in relation to seeking a contribution under section 305 of the Town and Country Planning Act 1990 applies to a local authority specified in a response notice as it does to the council on which the purchase notice was served.

17. What happens if neither the council nor another local authority or statutory undertaker are willing to comply with a notice?

17.1 If neither the council on which the purchase notice was served nor another local authority or statutory undertaker are willing to comply with the purchase notice, the council are required to serve on the owner by whom the purchase notice was served, a response notice to that effect.

The response notice must specify the council’s reasons for not being willing to comply and state that they have sent a copy to the Secretary of State.

17.2 The specified reasons should be one or more of the following:

• that the requirements of section 137(3)(a) to (c) of the Town and Country Planning Act 1990 (or section 32(2)(a) to (c) of the Planning (Listed Buildings and Conservation Areas) Act 1990) are not fulfilled, in which case the council should specify the use to which, in their view, the land in its existing state could be put;

• that, notwithstanding that the council are satisfied that the land has become incapable of reasonably beneficial use, it appears to them that the land ought, in accordance with a previous planning permission, to remain undeveloped, or be preserved or laid out as amenity land in relation to the larger area for which that planning permission was granted

• that another local authority or statutory undertaker which has not expressed willingness to comply with the notice should be submitted as acquiring authority for all or part of the land

• that, instead of confirming the notice, the Secretary of State should:

  • grant the planning permission or listed building consent sought by the application which gave rise to the purchase notice or revoke or amend specified conditions that were imposed; or
  • direct the grant of planning permission, or listed building consent, in relation to all or part of the land for some other form of development or works which would render the land capable of reasonably beneficial use within a reasonable time; or
  • in the case of a purchase notice served under section 137(1)(b) or (c), cancel or revoke the order or amend it so far as is necessary to render the land capable of reasonably beneficial use

18. What should a council’s statement of reasons for not complying with the purchase notice include?

18.1 It is not sufficient for a council just to state that the site has a reasonably beneficial use. A council’s statement of reasons should be full and clear. The reasons should explain fully, for example, why the land is capable of reasonably beneficial use, or why they regard the grant of planning permission (or listed building consent) or the cancellation, revocation or modification of the order (as the case may be) as desirable, or specify the likely ultimate use of the land which would justify the substitution of another local authority or statutory undertaker.

19. What information should be sent with the purchase notice to Secretary of State?

19.1 It is important that a council which has decided to send a purchase notice to the Secretary of State should promptly send the Secretary of State the information and documents the Secretary of State requires to deal with the notice. The Secretary of State cannot begin consideration of a notice without copies of the purchase notice, any accompanying plan, the response notice, the planning application with plans, and the decision on which the purchase notice was based. Other documents may also be necessary in particular cases.

19.2 The documents should, if possible, accompany the notice but sending the notice should not be delayed because all the information cannot be provided at the same time. Any information not immediately available should be sent as soon as possible afterwards.

19.3 Failure to supply all the relevant information within a reasonable time could lead to deemed confirmation of the notice if, as a result of delay, the Secretary of State is unable to complete their action within the statutory time limit.

19.4 Additional particulars and documents are also required as follows:

• copies of any planning permissions relevant to section 142 of the Town and Country Planning Act 1990 and accompanying plans
• copies of any orders made under section 97, section 100 or section 102 of the Town and Country Planning Act 1990 or section 23 of the Planning (Listed Buildings and Conservation Areas) Act 1990 and accompanying plans
• details of the location and condition of the land to which the notice relates and the nature of the surrounding land
• particulars of any permission or undertaking relevant to section 137(3) of the Town and Country Planning Act 1990 or section 32(2)(c) of the Planning (Listed Building and Conservation Areas) Act 1990
• copies of relevant policies and allocations from the statutory development plan
• statements whether the land, or any part of it, falls within an area which is the subject of a compulsory purchase order or the subject of a direction which restricts permitted development or restricts the grant of planning permission
• the nature of the local planning authority’s intentions for the land and the probable timing of any development involved

Copies of the documents submitted to the Secretary of State should be sent to both the person serving the notice and any county council. The Secretary of State should be told that this has been done.

The Secretary of State’s role

20. What action should the Secretary of State take on receiving a purchase notice?

20.1 Under section 140 of the Town and Country Planning Act 1990 the Secretary of State must give notice of their proposed action on the purchase notice, and to specify a period (not less than 28 days) within which the parties may ask for an opportunity of being heard by a person (normally a planning inspector) appointed by the Secretary of State before any final determination is made. The period cannot be extended once it has been specified in the formal notification.

20.2 It is important to note that, where a hearing has been held, the Secretary of State may depart from their previously stated proposal and reach a different decision on the notice. An Inspector conducting a hearing will therefore be prepared to hear, and report, representations made by the parties on any alternative course of action open to the Secretary of State.

20.3 If there is no request by either party to be heard, the Secretary of State must issue their formal decision in accordance with the proposed course of action previously notified.

20.4 The Secretary of State must consider whether to confirm the notice or to take other action under section 141 of the Town and Country Planning Act 1990. If, on the evidence before the Secretary of State, the Secretary of State is not satisfied that the relevant statutory conditions are fulfilled, the Secretary of State will not confirm the purchase notice. If the Secretary of State is satisfied that those conditions are fulfilled, the Secretary of State will either confirm the notice or, dependent upon the evidence before them, take such other action as may be appropriate under section 141.

20.5 Under section142 of the Town and Country Planning Act 1990 the Secretary of State is not required to confirm a purchase notice if it appears to the Secretary of State that, even though the land has become incapable of reasonably beneficial use in its existing state, it ought, in accordance with a previous planning permission, to remain undeveloped or be preserved or laid out as amenity land in relation to the remainder of the larger area for which that planning permission was granted. This provision is considered to have effect only when the whole of the purchase notice site is comprised in the area required to be left undeveloped in the previous planning permission.

21. Are the Secretary of State’s powers in regard to listed building purchase notices different?

21.1 The Secretary of State’s powers in regard to listed building purchase notices are in section 35 of the Planning (Listed Buildings and Conservation Areas) Act 1990. In contrast to the powers available to him in respect of purchase notices served under the Town and Country Planning Act, the Secretary of State:

• is required to confirm a listed building purchase notice only in respect of part of the land to which it relates, if the Secretary of State is satisfied that the relevant conditions are fulfilled only in regard to that part of the land; and

• may not confirm a listed building purchase notice unless the Secretary of State is satisfied that the land covered by the notice comprises such land as is required for preserving the building or its amenities, or for affording access to it, or for its proper control or management

21.2 If it falls to be considered whether another local authority or a statutory undertaker should acquire the land, in place of the council on whom the purchase notice was served, the Secretary of State must have regard to the ‘probable ultimate use’ of the land or building or site of the building (as the case may be). The Secretary of State will accordingly exercise their power of substitution only where it is shown that the land or building is to be used in the reasonably near future for purposes related to the exercise of the functions of the other authority or body, e.g. where the land is needed for the building of a school, the Secretary of State will require the county council to acquire the land.

21.3 The Secretary of State will not (as they are sometimes asked to do) require another local planning authority to acquire land solely on the grounds that they refused permission for development in the normal exercise of their planning powers. There is no provision for confirmation of a purchase notice on a government department.

22. Is a hearing or local inquiry always held?

22.1 It is usual to hold a local inquiry or a hearing which interested members of the public may attend in light of the alternatives open to the Secretary of State under section 141 of the Town and Country Planning Act 1990. If a request to be heard is made, the department will follow the relevant procedural rules for an inquiry or a hearing as far as practicable although they do not formally apply. The parties will also be expected to observe the spirit of the rules. Because of the statutory time limits for determining purchase notices it will not normally be possible to adhere to the timescales set out for normal planning appeals. Statements of case should be provided by the parties as soon as possible.

Appeals

23. Can an owner lodge an appeal against refusal of planning permission and serve a purchase notice?

23.1 There is nothing to prevent an owner from lodging an appeal against a refusal of planning permission as well as serving a purchase notice. It is, however, sensible to leave serving a purchase notice until the result of the appeal is known, if this is practicable, because, by virtue of section 336(5) of the Town and Country Planning Act 1990, any decision by the Secretary of State to grant planning permission for the development which is the subject of the appeal dates from the time when the original planning decision was taken by the local planning authority. Since the granting of planning permission would normally be regarded as rendering the land capable of reasonably beneficial use, it is unlikely that the landowner could substantiate a claim that the conditions set out in section 137(3) of the Town and Country Planning Act 1990 are fulfilled. In considering whether to appeal as well as to serve a purchase notice, an aggrieved applicant for planning permission should bear in mind the advice given above on the timing of the service of purchase notices. The Secretary of State’s attention should be drawn to any appeal which has been made to the Secretary of State, or any other matter which is before them for determination, relating to the purchase notice site or any part of it.

24. Is there a right of appeal against the Secretary of State’s decision on a purchase notice?

24.1 Once the Secretary of State has issued their decision on the purchase notice, the Secretary of State has no further jurisdiction in the matter. Appeal against his decision is to the High Court under section 288 of the Town and Country Planning Act 1990. If the purchase notice has been confirmed, the Secretary of State has no power to compel either of the parties to conclude the transfer of the land. Matters related to the transfer of the land are for the parties themselves to settle.

Compensation

25. How is compensation calculated?

25.1 When a purchase notice takes effect a notice to treat is deemed to have been served and the parties proceed to negotiate for the acquisition of the land as if the land had been the subject of compulsory purchase. If the parties are unable to agree the amount of compensation then either party may refer the matter to the Upper Tribunal (Lands Chamber) for determination. Where land is acknowledged to be incapable of reasonably beneficial use in its existing state, it will in most cases have little value and the landowner may simply wish to sell land which may be a liability for to the landowner. A person on whom a purchase notice is served may wish to take advice on the value of the land so that it does not spend a disproportionate amount of time disputing a notice about land which has no value.

25.2 For the purposes of calculating the compensation payable the valuation date is now fixed by section 5A of the Land Compensation Act 1961 being the earlier of (i) the date the authority enters on and takes possession of the land or (ii) the date when the assessment is made, either by agreement or by the Tribunal.

25.3 The nature of the interest to be valued is the interest which existed on the date the notice to treat is deemed to have been served.

25.4 The normal rules of compensation which apply in compulsory purchase cases will apply in the case of purchase notices except in some cases there will be no scheme of the authority which has to be disregarded.

25.5 A purchase notice is normally used in two circumstances. First: where the physical characteristics of the land make it impossible to derive any beneficial use. In such circumstances the land is likely to have no value. Second, however, land may not be capable of a beneficial use in its existing state but may be rendered capable of a beneficial use if developed, but for reasons of blight, planning permission will not be granted. In these circumstances it is possible to consider what planning permission may have been obtained absent the constraint and compensation will be payable on this basis. In this respect, these provisions complement the blight notice provisions in so far as they provide recompense to a landowner who is unable to secure any return from their land due to the blighting nature of public sector proposals.

Published 3 October 2024