Chancellor Philip Hammond has a private agreement with a house-builder that could see him make millions of pounds if green belt land he owns in Surrey gets planning permission for new homes.

This revelation is part of an investigation by Dispatches into why the country is not building sufficient number of good-quality affordable homes. Although more new homes are being built, the programme asks if they are of the right type and in the right place?

In the past much of the country’s social housing was built by local authorities but in recent times this has been left to housebuilders who can be forced to provide affordable homes in return for getting planning permission. But despite housebuilders enjoying bumper profits, the number of affordable homes being built is at a 20-year low.

Reporter Antony Barnett visits the sites of three large proposed housing developments across the country and examines what homes are being built.

In Surrey, he visits the site of a proposed new development on greenbelt land around Guildford.

Despite ministers promising to safeguard Britain’s greenbelt, 425,000 houses are now planned for the green belt in the UK. This is more than an increase of 50% since 2016 and the biggest year-on-year increase in for two decades.

Homes in greenbelt are rarely cheap and since 2009 only 1 in 6 are affordable.  But the rush to build means such sites can offer lucrative returns to housebuilders and landowners. If greenbelt land is rezoned for housing, the value of the land can soar in value by 100-fold, from £10,000 an acre to more than £1m an acre.

Dispatches discovered that one such landowner who could benefit from such a windfall is the Chancellor Philip Hammond. In 2008 Hammond bought 3 acres of greenbelt land neighbouring his family home in Surrey from housebuilder Martin Grant for £100,000.  Martin Grant Homes is planning to build 1,700 homes on greenbelt land near Mr Hammond’s home which has already been rezoned for housing.

Hammond came to an “option” agreement with the housebuilder that allows the housebuilder to buy the Chancellor’s land back in the future and any uplift in the value of the land would be split equally between the two. Although there are no current plans to rezone Mr Hammond’s 3-acre plot for housing,  a local property expert has estimated that should Hammond’s land get planning permission then  it could be worth £2m an acre leaving the Chancellor with a potential profit of almost £3m.

Dispatches asked Sir Alistair Graham, former chairman of the Committee on Standards in Public Life, if Hammond’s deal with a housebuilder gave him any concerns.

Sir Alistair said, “We don’t know the motivation of either Mr Hammond or the developer in terms of entering into this agreement but if there’s a potential of making substantial profit then in my view that should be declared. Because if in fact it were to become zoned for housing at some stage in the future then he could make a very substantial profit.  And the perception of not having declared that arrangement I think would be very damaging both to him personally and to his government.”

Hammond said: “The extra land was purchased to extend our curtilage and afford additional privacy and is part of our principle residence which is of course registered with the Cabinet Office. I have discussed the matter with the Director of Compliance and Ethics at the Cabinet Office and am confident there is no conflict of interest and there is no failure to comply with registration requirements.”

The programme also visits Northstowe in Cambridgeshire which is the site of one of the largest proposed housing schemes since Milton Keynes was developed some 50 years ago.

There reporter Antony Barnett discovers that Gallagher Estates, the private developer behind the 1st phase of 1,500 homes,  has successfully battled the council to halve the number of affordable homes and remove a restriction on minimum room sizes. Despite this, in November 2014 then housing minister Brandon Lewis threw the government’s “full weight of support” behind Northstowe.

Until recently the developer, Gallagher Estates, was owned by Anthony Gallagher, a major donor to the Conservative Party.

• In recent years Gallagher has given the Party more than £1.25m and is a member of the Leaders Group which offers wealthy donors the opportunity to meet with the Prime Minister. Gallagher met with Theresa May at the end of last year. 
• In February, Gallagher sold Gallagher Estates for some £500m and in April made a £20,000 donation to Brandon Lewis’s election campaign.

A spokesperson for Brandon Lewis said: “Decisions on appeals and specific developments would be for the local planning authority. Brandon stopped being the Housing Minister in July 2016. Donations to him are a matter of public record in the Register of Members’ Financial Interests”

A spokesperson for Anthony Gallagher said; “Any link between the donation to Brandon Lewis and the project at Northstowe would be mistaken. Its public knowledge that Mr Gallagher has supported the Conservative Party for some years and the donation was merely part of his ongoing support.”

The third housing development Dispatches visits is a Northamptonshire scheme to build 2750 homes in Towcester. It’s the constituency of Andrea Leadsom MP, Leader of the House of Commons and former Environment Secretary.

Originally the council wanted around 1,000 of the new homes to be affordable but the developers behind the scheme, Persimmon and Bloor Homes, negotiated this down to just 275. The developers argued that part of the reason they couldn’t afford to provide so many affordable homes  was that they were funding the building of  a much-needed relief road that would bypass Towcester.

• However, they only agreed to fund this once they had built and sold over 1,000 homes which could mean residents are waiting for up to 10 years.

This February, Leadsom intervened and got a pledge from her ministerial colleague, the Transport Minister, John Hayes, that he would help the developers borrow the money so the relief road could be built much earlier. Although this will be good news for residents it will also benefit the developers.

Sir Alistair Graham said: “I’m uneasy about all of this because Andrea Leadsom, because she is a minister, is able to persuade the Transport Minister.  I wonder how many other MPs wish that they could persuade the Transport Minister to come to their local village and talk about how he might facilitate getting a bypass road that otherwise may not happen?”

Andrea Leadsom told Dispatches, “My only focus has been on securing the early delivery of the relief road on behalf of my constituents.  I have always been clear that any agreement to facilitate the early delivery of the relief road early should not allow the developers to profit from public money and I have always complied with the ministerial code.”

Secrets of Britain’s New Homes: Channel 4 Dispatches Mon 10th July, Channel 4, 8pm
Reporter: Antony Barnett
Producer Director: Joanna Burge
Executive Producer: Geoff Atkinson
Co-Producer: Joe Casey