The appellants and the council agreed that the correct approach in assessing the level of affordable housing required should be based on the cost of equivalent provision on an alternative site in the borough. The council claimed that this would require a financial contribution of £2,680,000. The appellants maintained that they could only offer £300,000 because to provide more would make the scheme unviable.
The appellants explained that they had to pay a 25 per cent premium over and above market value to acquire the freeholds of properties on the appeal site. The council asserted that as a general rule of thumb it should only be necessary to offer between ten and 20 per cent. Dismissing the appeal would oblige the existing owners to accept a reduced premium, it reasoned.
The inspector agreed that if the 25 per cent premium were based on conjecture rather than clear evidence, then the council's position would be worthy of support. However, he noted evidence that the appellants had agreed a premium of 25.28 per cent with the owners. He saw no indication that dismissing the appeal would lead to the landowners accepting a cut in the purchase price. The offer of just two affordable housing units was acceptable because it would still only generate an 11 per cent profit for the developer, he ruled.
DCS Number 100-050-864
Inspector Simon Rawle; Inquiry.