Developer's profit reduced to facilitate more affordable homes in London

An inspector has allowed the redevelopment of a neglected brownfield site for mixed uses on the urban edge of north-east London in an opportunity area identified in the London Plan, despite concerns regarding affordable housing provision. The scheme involved 59 dwellings in three blocks of flats of 2-5 storeys, three four-bedroom houses and a small commercial unit of 89 square metres. 22 per cent of the homes were to be affordable.

The appeal was lodged against non-determination of the application. The council had raised concerns regarding the amount of affordable housing offered as part of the scheme and its impact on the delivery of the wider redevelopment in the opportunity area. The most recent policy context related to a 2017 SPG on Affordable Housing which distinguished between schemes that provided 35 per cent or more without public subsidy and those that did not. The latter were required to submit a viability assessment with the key test being that the "maximum reasonable amount of affordable housing should be provided".

Originally the council had contested the appellant’s figures regarding affordable housing values, costs, section 106 costs and developer’s profit. However, by the time of the inquiry the council had agreed to 22 per cent of the housing units being affordable with around a 50:50 split between shared ownership and affordable rent. The inspector noted that this was an increased offer and resulted in a reduction in developer’s profit from around 17 per cent to 12 per cent, but he opined this could be seen as an "investment by the developer in the regeneration of the area" serving as a "catalyst for further development elsewhere in the opportunity area". He agreed with the council that the amount of affordable housing offered was policy-compliant in being the maximum reasonable amount.

The inspector noted that the borough could not demonstrate a five-year supply of developable housing sites but felt this was not determinative because the borough were doing "a great deal to foster the provision of housing and the environmental transformation of this part of the borough" and "could hardly be doing more".

Inspector: David Cullingford; Inquiry

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