Thousands of affordable homes dropped due to 'loophole', Shelter claims

Updated: 

Thousands of affordable homes are being dropped due to a "loophole" used by developers, a report from Shelter claims.

Using Freedom of Information (FOI) research, Shelter looked at how "viability assessments" are reducing the numbers of affordable homes being built across several cities in England.

Viability assessments allow developers to reduce the number of affordable houses they build on their site, after showing that building them risks reducing their profits by a certain agreed extent.

Shelter said: "The research shows that when the loophole was used in the last year, some 2,500 affordable homes (79%) were lost from the number required by council policies."

The charity said its research sampled Birmingham, Brent, Bristol, Cambridge, Leeds, Leicester, Manchester, Newcastle and Oxford, as well as Kensington and Chelsea, and Southwark in London.

It said the assessments are being used more widely than in just these areas - "so the annual figure of lost houses is likely far higher".

Shelter chief executive Polly Neate said: "What this research reveals is the scale at which developers are able to use legal loopholes to protect their profits and dramatically reduce the numbers of affordable homes available for people."

Shelter said its research indicates that viability tends to crop up more often on larger developments.

Andrew Whitaker, planning director at the Home Builders Federation (HBF), said: "All affordable housing requirements set out in planning policy must be negotiable - they are aspirational targets."

He continued: "We have become increasingly reliant on the private sector for affordable housing provisions, in addition to expecting contributions towards infrastructure and local amenities.

"However, there is a limit as to what can be extracted from development sites before they become unviable."

Mr Whitaker said: "Without a willing landowner and developer you get no development and thus no affordable housing.

"A willing landowner will become unwilling if they do not get an acceptable price for their land and a developer will not be a willing developer if they do not get an acceptable return on their investment."

A Department for Communities and Local Government spokeswoman said: "Affordable housing is a top priority for the Government. That's why we have confirmed that funding for affordable homes will be increased by a further £2 billion to more than £9 billion, and since 2010 we have delivered almost 333,000 affordable homes."

She continued: "We are currently consulting on proposed changes to the approach to viability assessments. Our measures would speed up decision making and increase transparency, so that local communities know what is expected from developers on new sites."


SPONSORED FINANCIAL CONTENT