Developer Robert Hitchins appealed to the secretary of state over Forest of Dean District Council's non-determination of an application for 750 homes in Lydney.
The secretary of state agreed with an inspector's advice that the general economic situation cannot be used to justify a reduction in affordable housing. Robert Hitchins is now considering a High Court challenge.
Home Builders Federation head of planning Andrew Whitaker warned that the decision could affect housing delivery and questioned whether it contradicts previous advice to councils.
"We would refer to the letter from the DCLG chief planning officer pointing out the need to take account of viability when imposing policy requirements set under different economic circumstances," he added.
Drivers Jonas partner Steve Billington said: "We are seeing councils adopt a relatively flexible approach when negotiating affordable housing. This decision seems to suggest that it is unacceptable to agree levels taking only current market conditions into account."
He referred to a case in Godalming, Surrey, where an inspector ruled that development should be determined using current values. "Without government guidance, applicants and councils are left to negotiate site-by-site or rely on contradictory appeal decisions."
- See Casebook, page 20.