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Chancellor Philip Hammond could make millions of pounds if green belt land he owns gets planning permission for new homes in the future.

The Tory minister purchased three acres of greenbelt land neighbouring his family home in Surrey from housebuilder Martin Grant for £100,000.

He then came to an “option” agreement with the housebuilder in the 2008 sale 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.

A local property expert has estimated that should Hammond’s land get planning permission then it could be worth £2m an acre, netting him a potential £3million profit.

(Image: PA)

There are no current plans to rezone Mr Hammond’s 3-acre plot for housing, but 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.

This revelations emerged in investigation by Channel 4 Dispatches into why the country is not building sufficient number of good-quality affordable homes.

Mr 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.”

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 per cent since 2016 and the biggest year-on-year increase in for two decades.

While housebuilders enjoy bumper profits, the number of affordable homes being built is at a 20-year low.

Homes in greenbelt are rarely cheap and since 2009 only one in six are affordable.

(Image: PA)

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 £1million an acre.

Sir Alistair Graham, former chairman of the Committee on Standards in Public Life, said he believed such arrangements as Mr Hammond’s should be publically declared.

Any scheme could be similar to the MPs register of interests, whereby politicians declare second jobs or pre-empt potential business dealings that may affect them personally.

He 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.

- Dispatches, Secrets of Britain’s New Homes is on Channel 4 tomorrow at 8pm.