Using below-market land disposals to accelerate social housing

The housing crisis calls for solutions tailored to local circumstances, but all too often section 123 rules are blamed for stifling progress. Many local authorities fear they cannot sell land for social housing development, including temporary accommodation, because bids from cash-ready private developers always seem to come out on top. Neighbourhood-based organisations, such as community land trusts, often face the same challenge, with private developers typically snapping up sites to build homes for market rent and sale. Buzz words such as "section 123", "subsidy control" and "procurement" are often uttered through clenched teeth, accompanied by a weary shake of the head. A solution to the housing crisis lies in a different approach, particularly when it comes to understanding the rules that must be fulfilled when selling land for development. Instead of automatically selling to the bidder offering the highest price, local authorities can make greater use of consents available to meet the housing needs of people in their area. The real question, however, is this: what does the council want to achieve: a capital receipt spent on general purposes in the face of cuts or more homes people can afford? Local authorities already have more options than they imagine, and a close legal analysis of the rules surrounding general housing and other consents could help. Councils may hold land either for housing purposes in their Housing Revenue Account, where they have one, or in their General Fund. Section 123 Local Government Act 1972 applies to land held in the General Fund. It is section 32 Housing Act 1985 that applies to land held for the housing purposes under that Act. Section 32 of the Housing Act 1985 allows local authorities to dispose of land held for housing purposes, usually with the consent of the Secretary of State. A disposal may include a sale, lease, or other transfer of the land, and it also covers the grant of an option to purchase. General housing consents from the Secretary of State set out circumstances in which specific consent is not needed, giving local authorities much more freedom than may be realised. Close knowledge of the General Housing Consents 2013 (as slightly amended) will reveal the wording that makes this possible -–simply go to the part entitled "A. The General Consent for the Disposal of Land held for the purposes of Part II of the Housing Act 1985 – 2013".There is a strong case for updating both the General Housing Consents and the section 123 General Consent so that they are better aligned with the current UK subsidy control framework and the accompanying statutory guidance. One limb in this general housing consent allows the local authority, in many cases, to dispose of land for consideration equal to market value. Another allows it to dispose of vacant land without that market value requirement. Section 123, by contrast, allows principal councils to dispose of land in any manner they choose for the best consideration reasonably obtainable, unless the Secretary of State consents or the disposal is by way of a tenancy for a term of no more than seven years. The Local Government Act 1972: General Disposal Consent (England) 2003 provides the Secretary of State's consent to disposals of land where the following conditions are met:• First, the local authority considers that the purpose of the disposal is likely to contribute to the promotion or improvement of economic, social, or environmental well-being in relation to all or part of its area, or to persons resident or present there.• Secondly, the difference between the unrestricted value of the land and the consideration for the disposal does not exceed £2,000,000. The well-being limb is a legacy of the former well-being power, which was repealed by the Localism Act 2011, but it still sits comfortably alongside the Public Services (Social Value) Act 2012. The £2 million threshold, however, now looks incredibly dated. Disposals outside these limits require the specific consent of the Secretary of State. The Subsidy Control Act 2022 must also be considered. There is a strong case for updating both the General Housing Consents and the section 123 General Consent so that they are better aligned with the current UK subsidy control framework and the accompanying statutory guidance. For example, new consents could be designed to sit alongside the Housing Streamlined Subsidy Scheme, made on 14 April 2026, which allows public authorities to address viability gaps in social housing projects through defined routes. It really is time to recast the general consents so that they support the Government's housing mission, reducing unnecessary procedural barriers and making it easier to deliver homes that people can genuinely afford. Alignment with subsidy control law would be a good step in the right direction. Mark Cook is partner and head of procurement at Anthony Collins

Title

SOCIAL HOUSING

Using below-market land disposals to accelerate social housing

By Mark Cook | 09 June 2026

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