Local developments
Housing and Planning Guidance
We draw attention to the speech by the Prime Minister on 6th March regarding the “housing crises” and the provision of “affordable “housing. The Government is concerned about both the shortage and cost of housing. It appears that developers are permitted to aim for a “suitable return “(i.e. profit) of 20% but often claim that they cannot achieve this AND at the same time deliver the proportion of social subsidised housing - either for sale or rent - which Councils want.
The Government is suggesting that the ‘viability assessment ‘(through which developers can submit that they can only achieve a 20% profit on a scheme by reducing the proportion of social housing required by Councils) should be made public except in exceptional circumstances. Also, there is a proposal to urge developers to aim for a profit margin of about 6% when building social housing with the aim that this would guarantee an ‘end-sale ‘at a known value. It appears that the Government is keen to increase housing supply by encouraging developers to build more blocks of flats and convert and build on top of existing shops and offices provided that the final scheme is not higher than buildings in the immediate vicinity. In short, to build upwards.
The ‘permitted development ‘provisions (which originated in 2013 and currently extend to 2019) may also be amended to permit ‘upwards ‘extensions provided the extension is “consistent with the prevailing height and form of neighbouring properties”.
The Mayor of London (the Greater London Authority) is currently consulting on revisions to the London Plan (the GLA Planning Guidance document). One of the recommendations is that London Councils should seek an “affordable” housing contribution of at least 35% but for large schemes, e.g. on former industrial sites, they should aim for a 50% contribution. Such a high figure would probably meet with strong opposition by developers who would argue that they could not make a reasonable profit AND provide half the housing for ‘social’ needs.
David Freeman - May 2018
