In November 2014 the National Planning Practice Guidance (NPPG) was amended and, as a result, certain developments are now either exempt from affordable housing contributions pursuant to a Section 106 obligation or are able to benefit from a financial credit relating to the contribution payable.
The main changes are as follows:
1. Local Planning Authorities will no longer seek affordable housing contributions or pooled style contributions from developments of 10 units or less provided that the combined gross floor space does not exceed 1000 square meters.
2. Local Planning authorities can choose to apply a lower exemption threshold of 5 units or less to development in Designated Rural Areas (i.e. national parks and areas of outstanding natural beauty). No affordable housing or tariff-style contributions will then be sought from these developments.
Additionally, in a Designated Rural Area where the lower threshold is applied, affordable housing and tariff-style contributions should only be sought from developments of between 6 and 10 units in the form of cash payments on completion of the units.
3. The restrictions do not apply to development on Rural Exception Sites unless the development consists only of an annex or extension being constructed to an existing home, in which case no contributions are to be sought.
4. Where a vacant building is brought back into any lawful use or is demolished to be replaced by a new building, a financial credit equivalent to the gross floor space of the vacant building will be offered to the developer regardless of the size of the overall development.
The aims of the changes are twofold:
Firstly, the exemption thresholds are intended to reduce the disproportionate burden on small-scale developers resulting from Section 106 planning obligations. Increasing the profitability of smaller development sites will encourage small-scale developers to pursue greater development opportunities.
Secondly, the financial credit available in relation to the redevelopment of a vacant building provides a greater profit incentive for developers of any size that decide to develop such sites.
Please note that this information is provided for general knowledge only and therefore specific advice should be sought for individual cases.
For further information, please contact Andy Parker at
