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Will the revised NPPF lead to more affordable housing?

On 24 July 2018, the long-awaited revised NPPF was released. The omission of social rented homes from definition of affordable housing in Annex 2 of the draft revised NPPF has been addressed. Starter Homes are now included in the definition but secondary legislation is still required to set out financial eligibility for households.

What changes have been made to the current position on affordable housing?

Starter homes

The definition of Affordable Housing in the revised NPPF is much wider than in the 2012 NPPF. Starter homes are now included. What constitutes a starter home is set out in the Housing and Planning Act 2016. To qualify, it must be:

  • a new dwelling;
  • available for purchase by qualifying first-time buyers. To be a qualifying first-time buyer , the purchaser must be between 23 and 40 years old;
  • sold at a discount of at least 20% of market value;and
  • sold for less than the price cap (£450,000 in Greater London; £250,000 outside Greater London).

Other regulations particularly in relation to financial eligibility for households can be made by the Secretary of State.

Build to Rent

Affordable Private Rent will be the normal form of affordable housing provision under Build to Rent schemes. A Build to Rent scheme is purpose built housing which is 100% rented out.

How will this affect developers?

10% affordable housing threshold

The revised NPPF provides that where major development, involving the provision of housing is proposed, planning policies and decisions should expect at least 10% of the homes to be available for affordable home ownership. There is an exception to this where this would exceed the level of affordable housing required in the area, or significantly prejudice the ability to meet the identified housing needs of specific groups.

There is also an exemption to the 10% requirement where the proposed development provides solely for Build to Rent homes. However, it is not specified that these Build to Rent homes must be rented out on an affordable basis. Therefore, developers could provide less than 10% affordable housing on a scheme that is let at market value.

With the wider range of housing categories within the definition of affordable housing in the revised NPPF, developers should find it easier to meet the affordable housing requirements. However, planning authorities must specify the types of affordable housing provision required (in addition to the levels). Therefore, we could find planning authorities disregarding some of the affordable housing types, and focussing on others.

Brownfield land

To support the use of brownfield land, affordable housing contributions for the re-use or redevelopment of vacant buildings should be reduced by a proportionate amount. However, developers should note that this reduction in affordable housing provision will not apply to vacant buildings that have been abandoned. 

It remains to be seen whether the revised NPPF will lead to an increase in the provision of affordable housing, providing the "right homes in the right places", as promised by the government.

TLT has a wealth of experience in planning, development and social housing matters. Get in touch to discuss your requirements.

Contributor: Alexandra Holsgrove Jones

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at August 2018. Specific advice should be sought for specific cases. For more information see our terms & conditions.

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