Merton’s current Core Planning Strategy was adopted in July 2011. A new draft local plan for Merton has been in the works for some time and is due to be adopted on November 20th 2024.
Below we discuss the main changes that are to be implemented in the new Local Plan.
New Lower Threshold
Most importantly, a new threshold of 2-9 dwellings has been introduced in this Local Plan, requiring provision of financial contributions in lieu of affordable housing.
A 20% financial contribution will now be required from developments providing this gross number of units.
However, the new provisions are still subject to viability, so we can assist.
If you have a scheme of under 10 units which will be impacted by this new policy requirement, please get in touch today.
The new lower threshold is at odds with the NPPF’s guidance that such contributions should not be sought on non-major developments; however unfortunately more and more councils are adopting these low thresholds on the basis of need.
This often renders the smallest schemes unviable and undeliverable, as they do not benefit from the economies of scale of larger schemes.
Calculating payment in lieu:
The payment in-lieu will be calculated through two appraisals and the contribution will equate to the difference between the two residual values. The calculation is shown below:
The tenure split requested by the Council is 70% low-cost rent and 30% intermediate (minimum 25% first homes). This is the same for both threshold categories.
Applicants must present data for all the housing tenures proposed in their scheme as a percentage of the total residential provision.This must be done in three ways: number of homes, habitable rooms and total floorspace.
We can see above that the 10+ units’ threshold remains for onsite delivery; however, this has changed to a minimum of 35%, up to 50%, in line with the London Plan’s approach.
For public sector land or industrial land where there would be a loss of industrial capacity due to development, 50% is the minimum provision.
These affordable homes are to be provided on-site. It is only in exceptional circumstances and justified through a viability assessment, that an off-site or financial contribution would be better suited.
It must be demonstrated that applicants have taken into account the overall 50% target in the Borough and sought a grant where required, to increase the level beyond the minimum 35%.
The adoption of the new Merton Local Plan will have considerable affordable housing delivery and viability implications.
If you have a scheme of under 10 units which will be impacted by this new policy requirement, please get in touch today.
