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Mayor’s Supplementary Planning Guidance launched

Steve Cole, Programme Director- Housing

February saw the deadline for consultation responses to the Mayor’s new Supplementary Planning Guidance (SPG) on affordable housing and viability. The finalised document has now been published.

Background

The core of the SPG remains very much the same. Championing a consistent approach to planning across London, the Mayor reaffirmed his commitment to the long-term strategic aim of half of all new homes built in London being affordable, with Local Planning Authorities encouraged to follow this approach for all schemes providing 10 or more homes.

Threshold Approach

The key, and most controversial, element of the SPG is what was referred to as Route A in the consultation, a twin track or ‘threshold approach’ to planning approvals based on the percentage of affordable housing delivered, with Route B being the ‘viability tested’ route. A glance at the names alone (fast track vs the cumbersome sounding viability tested route) points to the direction Mayor wishes developers to take.

Fast track route

Applications which meet (or exceed) 35 percent affordable housing provision (or 50 percent where on public land) without public subsidy, provide affordable housing on-site, meet the specified tenure mix, and meet other planning requirements and obligations to the satisfaction of the LPA and the Mayor where relevant, will not be required to submit viability information.

There is a small but notable change of wording in the viability tested route. The original consultation required that as well as meeting the 35 per cent threshold developers had to ‘meet all planning requirements and obligations’.

As we flagged in our consultation response this would be a limiting factor on viability as schemes rarely, if ever, meet ‘all planning requirements and obligations’. We are pleased that the GLA has reworded this to ‘meet other planning requirements and obligations to the satisfaction of the LPA and the Mayor where relevant’.

This leaves scope for developers to have pragmatic discussions with local authorities about the impact of the threshold on their ability to deliver other planning requirements.

Viability Tested Route

The Mayor proposes that schemes which do not meet the 35 percent affordable housing threshold, or require public subsidy to do so, will be required to submit detailed viability information which will be scrutinised by the Local Planning Authority (LPA), and where relevant the Mayor. In addition, early and late viability reviews will be applied to all schemes. In reality, this is likely to be less onerous than the name indicates, especially as those in receipt of grant (e.g housing associations) will have to deliver through this route. Interestingly, it may present a challenge to boroughs given the potential requirement for additional resourcing.

Viability Assessments

The third part of the SPG provides detailed guidance on viability assessments, with the aim of establishing a standardised approach. Building on the London Borough Development Viability Protocol, the SPG sets out the information and assumptions which should be included in a viability assessment.

The SPG is explicit about the Mayor’s preference for using Existing Use Value Plus as the comparable Benchmark Land Value when assessing the viability of a proposal.

Build to Rent

Build to Rent (BTR) is now covered comprehensively in the SPG, with a strengthened definition of BTR including more detail on rent certainty, and not charging up-front fees. It also explains how BTR’s distinct economics should be taken into account when assessing planning applications.

The Mayor has bolstered the requirement for covenant and clawback arrangements if homes are sold out of the BTR sector. For example, if a covenant is included and a development is to be subject to the Mayor’s BTR pathway a clawback mechanism must now be included for planning permission to be granted.

Lastly, in comparison to the draft SPG the final version provides more supportive information on design outlining that flexibility on standards may be applicable in areas such as the number of homes per core and the number of single aspect homes.

In summary, there are no great surprises in the final SPG following the consultation but it has provided some welcome additional detail and a tightening of language.

The full SPG can be found on the GLA website https://www.london.gov.uk/what-we-do/planning/implementing-london-plan/supplementary-planning-guidance/affordable-housing-and

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