The wider changes to the NPPF have been covered exhaustively by many talented planning and legal professionals.
However, less noted have been key additions to viability and affordable housing guidance.
The newly adopted ‘Golden Rules’ on major development in the green belt are particularly of interest:
156. Where major development involving the provision of housing is proposed on land released from the Green Belt through plan preparation or review, or on sites in the Green Belt subject to a planning application, the following contributions (‘Golden Rules’) should be made: a. affordable housing which reflects either: (i) development plan policies produced in accordance with paragraphs 67-68 of this Framework; or (ii) until such policies are in place, the policy set out in paragraph 157 below;
157. Before development plan policies for affordable housing are updated in line with paragraphs 67-68 of this Framework, the affordable housing contribution required to satisfy the Golden Rules is 15 percentage points above the highest existing affordable housing requirement which would otherwise apply to the development, subject to a cap of 50%. In the absence of a pre-existing requirement for affordable housing, a 50% affordable housing contribution should apply by default. The use of site-specific viability assessment for land within or released from the Green Belt should be subject to the approach set out in national planning practice guidance on viability.
These transitional arrangements are clearly a high bar, particularly in areas which were not previously subject to affordable housing requirements.
Most importantly, the requirements now apply to all major development proposals for housing in the Green Belt in any form. Thus, any scheme over 10 units. As highlighted by several major housebuilders, this may stall a significant number of larger sites which were previously proposed for allocation due to viability.
A new para 029 has been also added to PPG Viability. This broadly states that on schemes subject to the ‘Golden Rules’ introduced into the NPPF 2024, viability ‘site specific viability assessment should not be undertaken or taken into account for the purpose of reducing developer contributions, including affordable housing’.
Combined with the wording of para 157 this has provoked some confusion as to whether viability assessment should be undertaken or not for Green Belt ‘Golden Rules’ sites.
Our view is this is a transitional point, subject to further consultation, but does not necessarily mean that viability assessment should not be undertaken at all. Simply not to reduce the overall percentage of affordable housing delivery.
Indeed, on sites attempting to deliver 50% affordable housing we consider that viability assessment is more important, as the tenure mix will be far more important to ensure a viable and deliverable scheme which is attractive to registered providers – which is challenging in and of itself currently as covered extensively by the HBF.
The key point to note is that the necessary percentage of affordable housing must be delivered and is non-negotiable. However, we expect there to be flexibility in tenures.
Also of interest is the note that we should expect additional consultation on new viability guidance in Spring 2025. This has been repeated elsewhere by ministers, and may lead to more widespread changes in the guidance:
‘The government intends to review this Viability Guidance and will be considering whether there are circumstances in which site-specific viability assessment may be taken into account, for example, on large sites and Previously Developed Land.’
In addition, the government’s response to the NPPF 2024 consultation makes clear that they will be consulting on intervention in the treatment of benchmark land values in 2025. This could have significant implications for landowners in the near future.
If you have any questions about the government’s new guidance, or need assistance delivering a viable scheme with high levels of affordable housing, please give us a call today.
