Affordable housing threshold appeal
In November 2014 Brandon Lewis issued a ministerial statement which introduced new policy in respect of planning obligations on small sites. The relevant paragraphs of the policy (PPG paragraph 012 to 020) had the effect of preventing authorities from seeking affordable housing requirements for developments of 10 dwellings or fewer (five dwellings in designated rural areas), or a maximum of gross floor space of 1,000 sq m.
They also provided for a Vacant Building Credit to be applied equivalent to the gross floor space of vacant buildings renewed or demolished as part of the development and deducted from the overall affordable housing contribution (PPG paragraph 021 to 023).
Reading Borough Council and West Berkshire District Council claimed that the introduction of the new policy, via the ministerial statement, would drastically reduce the amount of affordable housing across the country by more than 20%. Reading had claimed that the policy would result in a loss of up to 30 affordable homes each year in its area.
They have an annual target of 167, whilst West Berkshire (a more rural area) stated that it would lose almost a quarter of its affordable housing under the policy. The councils challenged the Government’s approach and the four grounds of challenge were:
- The policy created blanket exemptions which would have an immediate effect and override local plan policies
- The consultation process has been unfair and unlawful
- There was a failure to take into account material considerations when formulating the policy, including the impact on the supply of affordable housing
- There was a breach of the Equality Act 2010.
On 31 July 2015, a Planning High Court judgement supported the council’s challenge and effectively quashed the Government’s policy.
The Government challenged this judgement, and on 11 May 2016, the Court of Appeal reversed the High Court ruling and backed government plans to exempt small development sites from the need to have affordable housing included on them.
The July 2015 High Court decision would have been disappointing to those promoting smaller sites or seeking to use the Vacant Building Credit to make schemes viable.
The Court of Appeal ruling will, therefore, be welcomed by smaller-scale developers. It should help to improve viability of these sites and should re-invigorate the delivery of homes by smaller builders. However, The NPPG Guidance has not automatically been reinstated as yet and we will have to wait for the Government to do this.
There is still the possibility that the councils may seek leave to challenge through the Supreme Court. The Government may well wait until it knows if the councils will take this course of action before reinstating the NPPG guidance.
In the meantime, the Written Ministerial Statement is upheld, and our view is that councils should treat the statement as a significant material consideration in determining planning applications against their local policy affordable housing requirements.
There is, therefore, an opportunity for proposers of sites of less than 10 residential units to avoid affordable housing contributions and pooled contributions. However, it will be at the council’s discretion as to the amount of weight that would be given to the ministerial statement.
Where qualifying schemes have recently secured permission, it may be worth considering a variation to s.106 or a s.73 application in the case of affordable housing being dealt with as a condition. In addition, the Vacant Buildings Credit approach in the Written Ministerial Statement has also been upheld. The same principles apply and the statement should be a weighty material consideration in relevant decisions.
In other planning news, yesterday (12 May) the Housing and Planning Bill has now gained Royal Assent and is now the Housing and Planning Act. Bidwells will issue further information in due course.