Mayor proposes fast track for schemes with 35% affordable homes

Developers in London who provide 35 per cent or more affordable housing on their schemes without public subsidy would be freed from the requirement to provide detailed viability information, under proposals unveiled by the mayor today.

City Hall: supplementary planning guidance published (picture: kloniwotski)
City Hall: supplementary planning guidance published (picture: kloniwotski)

According to the draft supplementary planning guidance (SPG), published today, applicants for subsidy-free developments that meet or exceed the 35 per cent threshold will not be required to submit viability information, as long as the affordable housing is provided on site, and meets the borough’s specified tenure mix.

But applicants for developments that offer below 35 per cent affordable housing, or need public subsidy to attain that level, would be asked to submit detailed viability information, the document says.

Such schemes would also be reviewed to ensure that affordable housing contributions are increased if viability improves over time. But schemes that meet or better the 35 per cent threshold would only undergo such a review if an agreed level of progress is not made within two years of permission being granted.

A mayoral briefing note to journalists, issued yesterday, said: "The idea ... is to provide greater certainty and ... move away from protracted and uncertain viability negations".

In a statement, London mayor Sadiq Khan said that the guidance, plus the allocation in the chancellor’s Autumn Statement of £3.15billion for affordable housing in the capital from 2016-21, meant that "we can begin to ... move towards a long-term strategic goal of half of all new homes being genuinely affordable."

This prompted criticism from Andrew Boff, the Tory housing spokesman on the London Assembly, who said the mayor had clearly stated before the election that he wanted 50 per cent of new homes in London to be affordable. "Now this has become a long-term aspiration," Boff said. "The mayor has resiled on his housing target".

The draft guidance, which only applies to schemes that include ten or more homes, also:

  • Stipulates that at least 30 per cent of the affordable homes on housing schemes in London should be social or affordable rent products, with rents "that will generally be significantly less" than the 80 per cent of market rates that is the national norm for affordable rent. Another 30 per cent should be shared ownership or rent-to-buy, with the boroughs free to determine the tenure of the remaining 40 per cent.

  • Aims to establish a standardised approach to assessing viability. It says that scheme viability assessments should "usually" be based on the value of the land in its existing use, plus a sufficient premium to incentivise the landowner to release it, rather than on market value. It says that viability information relevant to planning determinations should, other than "in very exceptional circumstances", be publicly available.

  • Advises local planning authorities that they should recognise the "inherently lower returns" that build to rent schemes can offer compared to mainstream build for sale homes, and take these into account when considering applications for build to rent schemes.

In its briefing note, the mayor points out that the SPG "provides guidance to help speed up the planning process and deliver more affordable homes, but does not and cannot introduce new policy". That, it says, will have to wait for the new London Plan, the first draft of which is scheduled to appear next year. The consultation on the SPG runs until 28 February 2017.

The draft guidance was published alongside details of how the mayor would spend the £3.15 billion from 2016-21 for affordable housing allocated to him in the chancellor’s Autumn Statement.

The Greater London Authority said that the money would support 90,000 homes for low-cost home ownership and sub-market rent, to be started by March 2021 at the latest.

It added that the mayor had agreed with the government that 29,000 of these would be for London Affordable Rent, with most of them let at rates "substantially below" the 80 per cent of market rent ceiling that applies nationally to affordable rent homes.

The rest would be made up of shared ownership properties and rent-to-buy homes available to households earning up to £60,000 a year at London Living Rent rates.

The London Living Rent is set at no more than a third of ward average household income for middle earners, which the GLA said translated into a £977 per month average for a two-bed home.

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