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Court of Appeal overturns ruling on affordable housing

The Court of Appeal has overturned a decision, which held that a policy on thresholds for the provision of affordable housing was unlawful. 

On 28 November 2014, the government announced that: "due to the disproportionate burden of developer contributions on small-scale developers, for sites of ten units or less, and which have a maximum combined gross floor space of 1,000 square metres, affordable housing and tariff style contributions should not be sought." A lower threshold of " five units or less, beneath which affordable housing and tariff style contributions should not be sought" would apply in rural areas. 

The government went on to say that "a financial credit, equivalent to the existing gross floor space of any vacant buildings brought back into any lawful use or demolished for re-development, should be deducted from the calculation of any affordable housing contributions sought from relevant development schemes. This will not however apply to vacant buildings which have been abandoned." 

The changes were brought in with immediate effect.

However, the High Court in West Berkshire District Council & Reading Borough Council v Department for Communities and Local Government, ruled the policy unlawful. Since that decision, the level of affordable housing provision has been determined in accordance with the local plan, and developers have been unable to claim vacant building credit.

That looks set to change. The Court of Appeal's decision makes it clear that the policy was not unlawful. 

Housing and Planning Minister, Brandon Lewis welcomed the decision saying that the judgment "restores common sense to the system, and ensures that those builders developing smaller sites – including self-builders - don’t face costs that could stop them from building any homes at all.

"This will now mean that builders developing sites of fewer than 10 homes will no longer have to make an affordable homes contribution that should instead fall to those building much larger developments."

Whilst this is positive news for developers, it may not be the end of the story. The government stated that the Court of Appeal's decision restores the previous Ministerial Statement on the thresholds for affordable housing provision (and vacant building credit). The relevant wording has now been restored to the NPPF. It is possible that there will be a further appeal to the Supreme Court. We will continue to monitor developments and report them to you.

Contributor: Alexandra Holsgrove Jones

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at May 2016. Specific advice should be sought for specific cases. For more information see our terms & conditions.

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