Good news for small developers!

After a long-running battle with two Councils (West Berkshire BC and Reading BC), the Government has won the right to re-instate its policy allowing small residential development sites exemptions from making affordable housing contributions.

The Government first introduced its policy allowing small housing development sites (of less than 10 units and less than 5 units in rural areas) to be exempt from affordable housing (and other formula-based contributions) in November 2014, in an attempt to stimulate house building on small sites. West Berkshire Council and Reading Borough Council mounted a joint challenge to the policy in the High Court which resulted in the policy being ruled unlawful in July last year on the basis that the government had not collated sufficient evidence to justify exempting the small sites. The Government’s Vacant Building Credit policy was similarly found to be unlawful. In the latest twist however, the Court of Appeal has sided with the Government and over-turned the earlier High Court ruling thus paving the way for the small site exemption policy and vacant building credit to be re-instated.

The policy will allow residential developments of 10 units or 1000 sq m or less (including annexes and extensions) to be excluded from affordable housing levies and tariff based contributions. A lower threshold will apply in designated rural areas, National Parks and Areas of Outstanding Natural Beauty with developments of 5 units or less to be excluded from affordable housing levies and tariff based contributions. Where a vacant building is brought back into use or demolished for redevelopment, local authorities will provide a ‘credit’, equivalent to the floorspace of the vacant building, to be set against affordable housing contributions.

Welcoming the appeal judgement which was handed down on 11th May, planning minister Brandon Lewis said: “Today’s judgment by the Court of Appeal restores common sense to the system, and ensures that those builders developing smaller sites – including self-builders – don’t face costs that could stop them from building any homes at all.

This case was a total waste of taxpayers’ money and the uncertainty the case created amongst housebuilders stalled new development from coming through. I hope councils focus their time and money on delivering the front line service that their residents rely on and helping support new housebuilding in their areas that is very much needed.”

It is understood that West Berkshire Council and Reading Borough Council are considering whether to mount an appeal against the latest court verdict in the Supreme Court. The latest battle may therefore be won but the war may not be fully over.

In the meantime though, it is good news for smaller developers who will be eagerly waiting for the Government to re-write its policy advice through its on-line Planning Practice Guidance. We will need to wait and see how Councils, including Reading and West Berkshire will react in the interim.