United Trust Bank has welcomed the decision by the Court of Appeal to reverse a recent judgement which scrapped the government’s small sites affordable housing contributions policy (read the full story HERE).
The decision restores the policy meaning that affordable homes contributions will fall to bigger developers who are building the largest sites – while smaller builders, developing sites of 10 homes or fewer, will be able to get work started on their sites, without facing charges that could leave them unable to build any homes at all
Noel Meredith, executive director of United Trust Bank, said: “The Court of Appeal’s judgement overturning a High Court ruling and reinstating the government’s previous guidance to local authorities is very good news for smaller developers, the government, and anyone affected by the UK’s housing shortage.
“In November 2014, the government issued a ministerial statement advising local authorities that affordable housing should not be sought on developments of ten units or 1,000 sq m or less and that where a vacant building is brought back into use or demolished for redevelopment, local authorities should provide a “credit” equivalent to the floor space of the vacant building to be set against affordable housing contributions. That guidance was overruled by the High Court last summer and the ruling had a material impact on the viability of many smaller development sites because of the additional burden developers faced of meeting the costs of affordable housing obligations.
“By reinstating the government’s sensible guidance on this matter, the Court of Appeal will bring many smaller developments previously mothballed back into play and encourage smaller developers to once again to see small sites as good and viable opportunities. Not only does this decision help smaller developers, it will also help the government to meet its challenging target of building 1 million new homes by 2020 and everyone affected by the housing shortage.”
The policy was originally overturned after West Berkshire District Council and Reading Borough Council challenged it and brought legal action against the government.
And Meredith said that whilst local authorities will still be able to challenge the policy he does not expect the input to have a big impact.
He said: “Although local authorities will still be able to depart from the government’s advice where they consider that there are exceptional circumstances which dictate that affordable housing should be part of the scheme, these cases will make up a low proportion of the large number of smaller, often brownfield sites taken on by SME developers. The UK’s housing shortage will not be tackled by large volume builders alone, and SME developers need more encouragement to build on small sites, not more barriers.”