Decision on affordable housing thresholds lands in favour of exempting small development sites

A recent decision at the Court of Appeal has found in favour of a planning policy which exempts smaller development sites of 10 units or less, from affordable housing obligations.

What planning policy does the ruling relate to?

The proposals were first announced in November 2014 in a ministerial statement which introduced a small sites affordable housing contributions policy.  This subsequently became national policy and the changes sought to:

  • help preserve the commercial viability of small housing schemes;
  • help encourage brownfield development;
  • and boost housing delivery.

The key points of this policy are summarised below:

(i)    Developments of 10 units or 1000 sq m or less (including annexes and extensions) would be excluded from affordable housing levies and tariff based contributions;

(ii)    A lower threshold would apply in designated rural areas, National Parks and Areas of Outstanding Natural Beauty (as defined in section 157 of the Housing Act 1985), with developments of 5 units or less to be excluded from affordable housing levies and tariff based contributions. Development of between 6 and 10 units would be subject to a commuted sum payable on or after completion;

(iii)    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.

Larger sites have continued to be subject to affordable housing requirements.

At the High Court in 2015:

However, Reading Borough Council and West Berkshire District Council appealed against the policy and the case went to the High Court.  Their key areas of concern included fears the policy would reduce the amount of affordable housing by over 20% and that the government had not consulted appropriately.

The two councils won in the High Court in July 2015 and quashed the new policy.

At the Court of Appeal in 2016:

It was this decision that the Secretary of State then took to the Court of Appeal. On 11th May 2016 the appeal was allowed in full.

Next steps:

However at the time of writing, paragraphs 012-023 of the Planning Practice Guidance which dealt with the policy, have yet to be reinstated.

And it is worthwhile flagging that there has been no mention of the Vacant Building Credit by the government, they have only focussed on celebrating the affordable housing exemption. It will be interesting to see if all aspects of the policy re-emerge.

And there is still a possibility that the councils’ might take the matter the Supreme Court for a final attempt at challenging the decision.

We will continue to keep an eye on the situation and keep you updated as and when there is further news.

The decision can be read in full here.


The relevant parts of the Planning Practice Guidance were updated on 19th May 2016 including Vacant Building Credit.

About us:

Plainview Planning work extensively with small developers on new housing schemes and conversions.  If you want to understand more fully how these proposed changes may affect you, contact our team via or via 01242 501003