A recent Court of Appeal decision has given small builders and property developers an exemption from paying affordable housing contributions on developments of less than 10 dwellings.

There are now specific circumstances where affordable housing contributions, which developers usually pay to the council on the grant of planning permissions, should not be demanded by the local authority.

An Order of the Court of Appeal dated 13 May 2016 stated the following:

– no contributions should be demanded from developments of 10 dwellings or less, and which have a maximum floor space of no more than 1000 square metres;

– in designated rural areas, the local authority can choose to apply a lower threshold of 5 dwellings or less, and no contributions can be requested from these developments;

– in rural areas where the lower of 5 dwellings threshold is applies, contributions can be demanded from developments of 6 – 10 dwellings in the form of cash payments triggered on completion of the construction of the dwellings on the development;

– no contributions should be sought from residential annexes or extensions.

This is good news for small developers or individuals keen to develop smaller plots of land, in particularly following the rise in labour and material costs in the building market. The Home Builders Federation confirmed that these changes will provide a boost to small and medium buildings, citing ‘the time and expense’ of negotiating affordable housing contributions on small sites as a threat to the viability of small developments and to the growth of smaller firms.

The aim is to increase productivity within the building trade by removing financial obstacles and instead encouraging businesses to get available land and property back in use.  This will serve to boost the economy as well as providing much needed housing for the growing population.

Our solicitors here at Oglethorpe Sturton and Gillibrand are experts in negotiating planning agreements, drawing on a wealth of experience gained from working alongside local builders, developers and planning professionals.  If you have a planning matter and wish to discuss this, please contact a member of our property team today on 01524 846846 or via office@osg.co.uk .