Government proposals, which would have reduced the number of affordable new homes that developers are required to build, will no longer be pursued.
In August 2020, a consultation document was released which suggested development sites of up to 40 or 50 might be exempt from providing affordable housing, compared with the current limit of 10.
However, the proposals were widely criticised by social housing bodies, which warned that the supply of much needed affordable housing would be significantly affected.
Analysis carried out by the Local Government Association revealed that if the plans were allowed to go ahead, it would result in 30,000 fewer affordable homes being built over the next five years.
A Government statement, announcing a U-turn of its plans, said: “On balance, we do not consider this measure to be necessary at this stage, particularly in light of the broader way in which the sector has responded to the challenges of the pandemic and the other measures we have available to support SMEs.
“We therefore do not think any change to existing policy is currently needed.”
Rhys Moore, Executive Director of Public Impact at the National Housing Federation (NHF), commented on Twitter: “Some good news… affordable housing will continue to be delivered on smaller housing developments. Proposed changes would have resulted in significant loss of homes, across rural and urban areas”.
Back in November 2020, the Chief Executive of the NHF had warned the Housing, Communities and Local Government Select Committee that the planning reform proposal was the federation’s “biggest concern”.
According to the NHF, between 2016 and 2019, 70 per cent of affordable homes in rural areas were built through Section 106 agreements.
The Ministry of Housing, Communities and Local Government had originally argued that the proposal would benefit SME house builders and has now said that whilst it will hold discussions with smaller developers to understand the barriers they face, “there are no plans to raise the small sites threshold at this stage”.
For legal support and advice on the latest issues affecting the Social Housing sector, please contact a member of the Social Housing team on 020 8768 7000.