House developers - change to affordable housing policy for small development - our commercial property lawyers explain a recent case

In a recent High Court case, the UK government has lost a legal battle brought to the courts by West Berkshire District Council and Reading Borough Council against the exemption for small housing developments from affordable housing contributions and the vacant building credit.

The changes to government policy, introduced in December 2014, amended the National Planning Practice Guidance to exclude housing developments with 10 units or less or that were smaller than 1000 square metres in area, from affordable housing levies and tariff based contributions. A lower threshold would apply in designated rural areas, National Parks and area of outstanding natural beauty, with developments of 5 units or less to be excluded.

These changes were made in a bid to encourage the development of smaller housing sites which may otherwise have been unworkable due to the onerous affordable housing policy obligations.

Following the landmark High Court judgement, the changes to the guidance relating to planning obligations for small development schemes are now to be abolished meaning councils can continue to seek affordable housing contributions and payments from the previously exempted development sites.

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