NEWS
06/08/2020 14:38 BST | Updated 06/08/2020 15:55 BST

Government Sneaks Out Plan That Could Cut Thousands Of Affordable Homes A Year

Changes to the rules could see new affordable housing provision drop by 20%.

New developments of up to 50 homes may no longer have to provide any affordable housing under proposed changes to government planning rules. 

Hours after the Ministry of Housing, Communities and Local Government (MHCLG) released an 80-page document proposing to reform the whole system, a second major consultation appeared online detailing plans for “shorter-term” changes to the existing rules.

Current regulations include a small sites threshold dictating that developments with 10 or more homes (or covering more than 0.5 hectares) must contribute affordable housing. 

Proposed guidelines could increase this five-fold, with the consultation document suggesting that small development sites with up to 40 or 50 homes (or up to 2.5 hectares, around the same area covered by three standard football pitches) would not need to provide a single affordable dwelling.

The government justifies this temporary change by saying it will boost building and support the construction industry in the wake of lockdown and throughout the ongoing Covid-19 crisis.

According to government statistics, there were 16% more builder and developer insolvencies in 2019 than in 2018 – the vast majority of which were small and medium enterprises, a situation exacerbated by coronavirus. 

The proposals are expected to remain in place for eighteen months, but there are fears they could be extended, leaving many areas – particularly overcrowded cities such as London which is primarily focused on small site developments – without the assurance of affordable housing for years to come. 

The consultation was published almost in parallel with the Planning for the Future white paper, which repeatedly states the importance of maintaining and improving levels of affordable housing.

The document states that if the small sites threshold is cut to 40 units, the government would expect to see a reduction of between 7% and 14% of section 106 affordable housing delivery over a single year, assuming overall housing delivery remained constant. If it’s cut even further – to 50 units – this would be between 10% and 20%. 

Alistair Berg via Getty Images

Planning expert Nick Perry, chair of The Hackney Society, told HuffPost UK: “The first thing to be aware of is for all of the language around it being temporary, and some acknowledgement of what those temporary effects could be, it could last for a long time or it could be extended. 

“It does seem slightly ludicrous to all of a sudden bring in this category of ‘no affordable required’ sites that are four times, five times as big as they were. 

“In London terms, two-and-a-half acres is a big site. What that means is the vast majority of sites, the important sites, would now be under that threshold, and many smaller developers are not going to be building any affordable homes. 

“They will be totally removed from that system, won’t even have to give money in lieu of it, and I’m not sure who that benefits.” 

The National Housing Federation previously said its member housing associations built around 39,000 affordable homes in 2019 – more than two-thirds of the total – of which 54% were delivered through Section 106 agreements, which are used to require developers to build a certain amount of social homes on a site.

The proposed changes to the current planning system also include a policy stating that a minimum of 25% of all affordable homes created through developer contributions should be First Homes – the government’s new scheme offering first-time buyers a 30% discount on a property.

The plans also state First Homes should “replace as a priority other affordable home-ownership products”, such as shared ownership.