Out-Law / Your Daily Need-To-Know

Councils and property industry representatives voice concerns over government's "vacant building credit"

04 Feb 2015, 5:08 pm

Local authorities and property industry representatives have voiced concerns about a policy change reducing the affordable housing contributions councils can seek where vacant buildings are demolished or brought back into use.

In December, the Department for Communities and Local Government (DCLG) published its response to a consultation (10-page / 334 KB PDF) on section 106 planning obligations. In the response, the DCLG said it would press ahead with a policy change that would require councils to deduct from affordable housing contributions "a financial credit equivalent to the existing gross floorspace of any vacant buildings brought back into any lawful use or demolished for re-development".

In a statement this week, the London Borough of Southwark said the change, which has been dubbed the "vacant building credit", meant brownfield sites awaiting development in the Borough "could deliver only a fraction of the potential affordable housing, rather than the 35 % affordable housing provision usually required".

"People are in desperate need of affordable housing," said the Borough's cabinet member for regeneration, Mark Williams. "In Southwark we are doing all we can to meet the challenge and have built more affordable homes in the last three years than any other London borough. However, the government's latest changes will drastically reduce the number of affordable homes we can build."

According to a report in the Estates Gazette, Westminster City Council estimated that it could lose more than £1 billion each year in affordable housing payments as a result of the policy change. The Council's deputy leader, Robert Davis told the Estates Gazette that the Council intended to open "immediate discussions with the DCLG to emphasise to them the consequences of these changes".

Developers' representative the Westminster Property Association (WPA) said the WPA supported the Council's opposition to the credit. WPA chairman Daniel Van Gelder said in a statement this week that the application of the policy change to central London was "clearly flawed".

"In addition to removing an important element of developer contribution to the provision of affordable housing, further eroding the ability of people from a wide range of backgrounds to live in the heart of the capital, our concern is that these changes may result in yet more office space being lost to homes in central London, as they could encourage an increase in office-to-residential conversions," Van Gelder said.