The Government is considering changes to how “affordable” homes will be funded. These are homes sold through financial arrangements such as shared ownership schemes or offered for sale or rent at below the market rate.Plans being drawn up would result in developers paying a levy and councils then being given the power about where and how the houses are built. 

For proposals today of more than 10 dwellings, developers are required to provide on-site affordable housing. In the Royal Borough this is 30% of the total number of units, and in the draft proposed Bracknell Forest local plan, it is 35% of the total. On-site development can be avoided where “off-site provision or an appropriate financial contribution in lieu can be robustly justified” by the developer.

As an example, the recent approval at Heatherwood for 230 homes will result in £6 million in contributions to support the provision of affordable housing. There will be NO affordable housing on-site. This has been justified by the developer on non-viability grounds. This was despite there being a prima facie case for such homes for “key workers” with the new hospital next door. 
Existing planning obligations give councils the power to force developers to take measures to benefit the local community in return for permission to start new developments.  These requirements known as “Section 106” would be scrapped and replaced by a levy payable to councils and distributed at their discretion.  These ideas do raise questions.  

  • Providing affordable housing on-site, which should be indistinguishable from the market housing, can act as a dampener for reducing house prices in the whole site development and this would be lost. 
  • Affordable housing could be distributed disproportionally around the local authority. The requirement for homes that are within the price range of young families applies across the whole council and are not in specific areas.  
  • It is It is unclear whether this would be restricted just to house building, or whether the funds could be syphoned off into wider infrastructure projects such as community facilities and highways improvements.  

Michael Gove, government minister responsible for levelling up, is likely to secure approval for a formal consultation on the proposals which could be launched within weeks.