A Labour government would scrap rules forcing councils to pay massively inflated prices for land so new homes can be built, it is expected.
Shadow Levelling Up Secretary Lisa Nandy is drawing up a radical shake-up of the way land is valued if local authorities want to use it for housing projects.
At the moment councils making compulsory purchase orders - which force landowners to sell - have to pay a "hope value", which is worked out based on future planning permission.
This means sites sell for up to 275 times higher than their present value, it is estimated.
It comes as the Tories face growing pressure over their failure to build new homes, with weak Rishi Sunak's decision to scrap housing targets blamed for this month's local election mauling.
A Labour insider told the Financial Times: “We want local areas to capture and benefit from a lot more of the uplift than they currently do when development occurs.
“We want to tilt the balance of power. It feels like the scales are tilted towards . . . landowners, we want to re-tilt it towards the communities that want to see more houses built,”
Labour argues that the proposal would not see the state paying below market value.
Researchers from the Centre for Progressive Policy estimate that farmland worth £22,520 per hectare rockets to £6.2million per hectare if it has planning permission for development..
Rather the proposal would see the policy constraints taken into consideration in the same way that current rules, including the application of "hope value", impact market price.
Officials believes such an approach would bring England in line with arrangements in Germany, France and the Netherlands.
Housing supply is likely to dominate the months leading up to the next general election.
The Prime Minister was forced early in his premiership to drop plans for mandatory local housing targets as part of a plan to build 300,000 homes a year in response to a revolt by Tory MPs and activists.
But Mr Sunak remains under pressure to get Britain building in order to increase the supply of homes to alleviate soaring rents and shortages.
Earlier this month, Housing Secretary Michael Gove admitted the challenges facing those who want to own a home.
"There is a problem and the problem is there simply aren't enough homes in this country," he said. "It is increasingly difficult to get on the property ladder."
A Department for Levelling Up, Housing and Communities spokesperson said: "We want councils to be able to unlock more land for affordable housing, which is why we are reforming compensation for compulsory purchase orders.
"The current rules can significantly increase costs for councils and our reforms will ensure the taxpayer gets best value for money, by removing 'hope value' where justified and in the public interest.
"It will ultimately be for the Secretary of State to decide whether a compulsory purchase order can be approved and if the removal of hope value is appropriate."
