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Planning inspector alters affordable homes requirement due to economic viability issues

A planning inspector has altered the affordable homes requirement in a planning obligation agreed between a housing developer and a London council, after determining that it rendered the proposed scheme economically unviable.13 Aug 2014

Newham Council granted full planning permission in 2005 for proposals for a 36-home residential development in the Forest Green area of east London, renewing the permission in 2010, and work commenced on site in 2013. A planning obligation agreed in 2007 and varied in 2012 required the provision of 13 affordable homes in the scheme, a figure which developer Sunbury Homes believed made the scheme economically unviable.

The Growth and Infrastructure Act introduced a procedure enabling developers to apply for affordable housing requirements in planning obligations to be modified, removed or replaced where they render a development economically unviable. The developer applied to the Council to remove the obligation under the new procedure in March 2014. When the Council failed to determine the application, Sunbury applied directly to the Planning Inspectorate to determine the application.

In a decision dated 1 August (8-page / 100 KB PDF), planning inspector P W Clark concluded that "the present scheme is not economically viable", noting that the Council's own affordable housing economic viability assessment indicated that the site would be unviable with 25% affordable housing.

The inspector also felt, however, that the removal of the affordable housing requirements in their entirety "would be more than is necessary to return the scheme to viability", estimating that a surplus of £268,960 would be created as a result.

Disagreeing with the Council's assertion that two three-bedroom affordable houses could be provided on site without the scheme becoming unviable, Clark decided to amend the planning obligation, to require the developer to pay £268,960 to the Council "towards the provision of affordable housing off site".