Half of new homes based outside of Croydon town centre to be affordable homes

Tim Naylor, head of spatial planning at Croydon Council, announced the revised requirements at the National Planning Summit last month.

The Council's revised affordable housing policy was set out in the Croydon monitoring report in January and is effective from 1 April.

It says that if a development outside the Croydon town centre opportunity area has more than 10 homes, at least half of the units or bedrooms must be provided as affordable housing. Proposed developments based within the town centre continue to have a minimum requirement of 15% but the Council will negotiate to achieve up to 50% affordable housing, which in practice means that applicants will have to undertake a viability assessment to justify their level of affordable housing.

The 2009 dynamic viability model suggested that a minimum requirement of 15% was sustainable and this remained the case during the years of the recession. Last year, this was increased to 30% for developments outside the town centre and has now been increased to 50%.

Croydon's local plan policy adopted in April 2013 was flexible and allowed for the minimum on-site affordable housing requirement to be reviewed on an annual basis in order for the Council to react to any recent market changes or demands. Naylor said the model "tracks the market progress and then plays that back into a viability process so that we can determine what we should be delivering in terms of the viability that the market can deliver". The Council said that as the market has improved over the last two years, the level of affordable housing has also picked up.

The need for affordable housing was addressed in the Council's strategic plan and a target for 2031 was to "achieve a level of affordable housing that addresses the level of need, whilst still ensuring that developments are viable and much needed market homes continue to be built in Croydon".

The policy will apply to all planning applications still to be determined from 1 April and to all applications made after that date until the next review in April 2016. It will not affect applications approved before 1 April pending a section 106 agreement, even if those proposals do not include 50% affordable housing.

Councillor Alison Butler, cabinet member for homes and regeneration, welcomed the move and said that it will contribute to ease the housing shortage. "We are passionate about increasing the amount of affordable homes in Croydon. Like other London boroughs, we are in the midst of a housing crisis which is denying families a decent home to live in" said Butler.

Another councillor, Dudley Mead, said that the policy could leave the area with "empty plots and [it] won't increase the supply of housing."

Planning expert Jo Miles of Pinsent Masons, the law firm behind Out-Law.com, said: "Meeting the need for affordable housing and infrastructure without overburdening development is at the heart of planning and plan-making. Croydon adopted its CIL charging schedule in April 2013 and charges £120psm for residential floorspace except in the Croydon Metropolitan Centre where a zero rate applies."

"Developers of sites outside the town centre will therefore have to pay both local and mayoral CIL as well as deliver affordable housing and other site specific infrastructure requirements. The Council's monitoring report concludes, based its review of house price and construction cost indices, that more than 50% affordable housing would be viable outside the town centre," she said. "However, some in the development industry consider this substantial jump in the minimum requirement from 30% to 50% as inflexible and not adequately justified, given there is no flexibility built into the policy."