November 26, 2020

Smaller developments boosted by raised ‘affordable homes’ threshold

Housebuilders have defended proposed planning changes allowing up to 40 to 50 homes to be built before an ‘affordable homes’ quota kicks in. 

Last week the Local Government Association criticised the government for the proposals, which it claimed would have resulted in 30,000 fewer homes being built over the last five years. 

But the National Federation of Builders (NFB) said raising the limit from the current ten homes threshold to 40 or 50 would allow more small developers to build homes.  

NFB housing and planning policy head, Rico Wojtulewicz, said: “Negotiations on affordable homes has meant that developments have been delayed by up to two years. If you raise the threshold for building affordable houses then more homes will be built throughout the country.” 

Affordability challenges being addressed 

Mr Wojtulewicz that added first-time buyers’ access to help-to-buy would still enable them to get onto the first rung of the property ladder even in hotspots like the South East. 

Currently, developments of more than ten homes must have a 20 to 30% ratio of affordable properties. Mr Wojtulewicz said this had acted as a deterrent for many smaller developers. 

LGA housing spokesperson and Swindon borough council leader David Renard said: “Proposals to exempt developers from having to build affordable housing on certain small sites are of huge concern. With rising housing waiting lists and record numbers in temporary accommodation, we desperately need to be building more affordable housing, not less.” 

Mr Wojtulewicz said since 2018when the cap on local authorities’ housing revenue accounts was lifted, it was now possible for them to contractlocal builders to create council homes. 

He pointed to forthcoming first home legislation where local first-time buyers are to be given a 30 per cent discount on new build homes in their area as another affordable homes measure. 

Brokers Hank Zarihs Associates said the changes would help SME developers especially in the wake of the current Covid-19 crisis survive and make it easier for them to gain construction loans.