Elmbridge 2

This case involved the conversion of the existing listed building from B1 (now E) use to C3 residential, internal alterations, the demolition of an existing outbuilding to allow the erection of a single storey rear extension and the reconstruction of the side gable to create a total of 3 new flats.

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Policy CS21 of the Elmbridge Borough Councils Core Strategy suggests developments of 1 – 4 units should provide a financial contribution equivalent to 20% of the gross number of dwellings. In this instance, a contribution of £111,000.

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Elmbridge Borough Council seeks a financial contribution equivalent to 20% of the gross development. In this instance a contribution of circa £111,000 was sought.

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S106 Managements Financial Viability Appraisal (FVA) demonstrated a significant deficit, meaning that even without the inclusion of S106 contributions the scheme was not generating the sufficient levels of profit to provide the offsite financial contribution towards affordable housing.

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S106M also utilised the opportunity to apply Vacant Building Credit (VBC), meaning that the developer should be awarded a financial credit against the vacant floor space. In this case, the vacant floor space equated to 90% of the proposed development. Therefore, regardless of the viability of the scheme, the maximum contribution that could be requested was reduced £11,100.

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Elmbridge Borough Council instructed BPC Surveyors to review the S106 Management FVA. Their review agreed that the scheme was not viable, and a significantly reduced contribution was appropriate.

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Our blog post on Vacant Building Credit can be seen here:

https://www.s106management.co.uk/news/vacant-building-credit-what-is-it-and-how-can-it-be-used

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Contact us today to discuss your s106 affordable housing viability needs.

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