The Court of Appeal has backed the government’s decision to waive affordable housing requirements for small developments.
The decision, which has of course been welcomed by the Federation of Masters Builders (FMB) and SMEs across the country, means that for developments of 10 homes or fewer, local councils cannot impose affordable housing or Section 106 contributions.
Section 106 of the Town and Country Planning Act 1990 enables local planning authorities to seek contributions from developers to provide affordable housing and mitigate the impact of developments.
The housing minister first announced the news in November 2014, but West Berkshire Council and Reading Borough Council quickly joined forces to challenge the proposal, meaning the case was dragged through the courts, going back and forth for the past two years. The High Court first quashed the plans to exempt developments of less than 10 homes last year, but then the government appealed and the Court of Appeal finally overturned the High Court’s decision last week (11 May) – and about time too!
The government have criticised the decision by the councils to take legal action, calling it a waste of tax payers’ money and I completely agree with housing and planning minister, Brandon Lewis, when he said it just restores common sense to the system. It now means that builders don’t suffer just because they’re developing smaller sites.
The decision will back SME house builders, which I have been fully supportive of for many years. Not only will it make it much easier for small scale developments, but it should put SME house builders at ease. There are many small sites which builders are keen in developing, but they are put off by the Section 106 charges, which is a shame for the housing market.
The councils could have used the time and money it’s taken over the past two years, to support new housebuilding in areas where it is very much needed. The contributions have stopped the potential development of a huge number of small sites, which could have played a massive part in helping us reach the 275,000 affordable homes needed by 2020.
The new threshold will protect small developments from unaffordable, unnecessary requirements, meaning they can finally get back to what they’re good at, building small, sustainable developments.