Teal blue header image

Mayoral CIL reform set to hit office, retail and hotel developments hard

Mayor of London, Sadiq Khan, has issued a consultation on reforms to the Mayoral Community Infrastructure Levy (CIL)

He is proposing that the changes take effect from April 2019.

The most dramatic change suggested is that for hotel developments, which will pay £140 per square metre in central London and the Isle of Dogs. This equates to an increase of 98% when compared to the equivalent section 106 charge in central London. Office developments will be subject to a charge of £185 per square metre, with retail being hit by £165 per square metre. Proposed residential rates are to be increased by up to 60%.

The revised Mayoral CIL, known as MCIL2, is to help deliver Crossrail 2, which is intended to transform journey times and connectivity across London and the wider South East, and support 200,000 new homes and 200,000 new jobs along the line of the route.

The proposed rates are set out in the consultation, which closes at 6pm on 7 August 2017.

It remains to be seen how long CIL, as a means of raising revenue from development, will be with us. A report released earlier this year, recommended significant change to the current system. However, that report suggested that 2020 would be an appropriate deadline for changes to be brought in. This was to correspond with the end of the last Parliament. With the snap election earlier this month, it is likely that any significant change to CIL could be delayed.

Fergus Charlton, Legal Director in TLT's Planning Team, said "It is hard to escape the reality that any increase in CIL will squeeze project viability, and this will put more pressure on the delivery of affordable housing."

Contributor: Alexandra Holsgrove Jones

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at June 2017. Specific advice should be sought for specific cases. For more information see our terms & conditions.

Insights & events View all