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Small developments do not have to contribute towards affordable housing

The Court of Appeal has made a landmark judgement, upholding the government’s decision to exempt developments of 10 houses or fewer from Section 106 of the Town and Country Planning Act.

The original policy, which was introduced in 2014, was established to ensure the burden of affordable housing contributions did not fall on small-scale developers, including self-builders.

The latest decision upholds this policy, and means that local authorities cannot seek contributions from small development sites towards affordable housing, despite many continuing to do so.

The Court of Appeal overturned a previous ruling in favour of a joint legal challenge from Borough Council and West Berkshire Council, which argued that excluding certain developments from affordable housing levies was unlawful.

In what has been called a “common sense” decision from some MPs, developers building smaller sites will now be able to get on with building, without worrying about additional costs that could make these developments economically unviable.

Commenting on the development, the Housing Minister said: ‘We’re committed to building more homes, including record numbers of affordable homes – key to this is removing unnecessary red tape and bureaucracy that prevents builders getting on sites in the first place.”

However, councils have warned that the government’s ‘Starter Home’ initiative will not succeed without adequate funding.

With local authorities across England disappointed with the decision – and reliant on all developers to help meet affordable housing targets – it is unclear whether this is the end of the matter.

A joint statement from the two councils involved in this case states that: “West Berkshire and Reading Councils are naturally disappointed by this result. We are reviewing this verdict and currently considering our options as a matter of priority with regard to appeal.”

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