27 June 2016

Small development threshold for affordable housing contributions

By Katy Moss

The ability of local authorities to request contributions towards affordable housing (or social housing) has now gone full circle.

In November 2014 the written ministerial statement issued by the Secretary of State updated the national Planning Practice Guidance which resulted in three significant changes.

  1. Developments of 10 units or 1000 square metres or less (including annexes and extensions) are to be excluded from affordable housing levies and tariff based contributions.
  2. A lower threshold is to apply in designated rural areas, national parks and areas of outstanding natural beauty where developments of five units or less will be excluded. Developments of between six and ten units would be subject to a sum payable by cash payment only on or after completion of the build.
  3. Where a vacant building is brought back into use or demolished for redevelopment, local authorities will provide a ‘credit’, equivalent to the floor space of the vacant building to be set against affordable housing contributions.

The changes were not well received by some local authorities and in particular, West Berkshire District Council and Reading Borough Council took the matter to Judicial Review. Although the High Court ruled in their favour, thereby effectively removing the updates to the Planning Practice Guidance, on appeal by the Secretary of State, the Court of Appeal reversed the decision of the High Court meaning that the three significant changes are now back in place.

The original intention of the Secretary of State to tackle the disproportionate burden of developer contributions on small scale developers, custom and self-builders can now attempt to be tested and inevitably (subject to further U-turns) will be a welcome change for small developers.

Contributions which are necessary to overcome regulatory or EU Directive requirements will (in the short term at least) still be applicable to the small scale developments. Likewise the changes do not affect the application of Community Infrastructure Levy but nevertheless the changes could significantly reduce the cost of smaller scale developments.

Katy Moss is a solicitor in the Property department at Barker Gotelee Solicitors in Suffolk.

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