Court of Appeal decision will help build homes on small sites

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Small sites will be exempt from affordable homes contributions, which will enable developers to build more properties…

Housing and Planning Minister Brandon Lewis has welcomed a Court of Appeal decision to allow more housebuilding on smaller sites.

The small sites affordable housing contributions policy was introduced in November 2014. It aimed to help increase the number of homes built on brownfield development. It meant that developments of ten units or fewer, with a maximum combined gross floor space of no more than 1,000 sq m, should not pay affordable housing contributions.

The judgment will restore a government policy which allows affordable homes contributions to land on the shoulders of larger developers building on large sites. Smaller builders working on sites of 10 homes or fewer will be able to start work without charges that may halt building.

The legal action, brought to the Court of Appeal, was instigated by West Berkshire District Council and Reading Borough Council. Ministers lambasted the decision to challenge the policy as “a total waste of taxpayers’ money”.

Lewis said: “We’re committed to building more homes, including record numbers of affordable homes – key to this is removing unnecessary red tape and bureaucracy that prevents builders getting on sites in the first place.

“Today’s judgment by the Court of Appeal restores common sense to the system, and ensures that those builders developing smaller sites – including self-builders – don’t face costs that could stop them from building any homes at all.

“This will now mean that builders developing sites of fewer than 10 homes will no longer have to make an affordable homes contribution that should instead fall to those building much larger developments.

“This case was a total waste of taxpayers’ money and the uncertainty the case created amongst housebuilders stalled new development from coming through.

“I hope councils focus their time and money on delivering the front line service that their residents rely on and helping support new housebuilding in their areas that is very much needed.

Chief executive of the Federation of Master Builders Brian Berry praised the decision. He said: “We welcome the Appeal Court’s decision to confirm the Government’s right to waive Section 106 affordable housing contributions for sites of ten units or fewer.

“It’s widely recognised that if we are tackle the long-term undersupply of new homes in this country, then we will need to see renewed growth in output from SME house builders.

“Today’s verdict will go a long way in backing these firms. It will make the economics of small scale development that much easier and should increase the use of small sites in sustainable locations for the delivery of new homes.”

Berry continued: “Nearly one-in-two SME house builders know of sites they would otherwise be interested in developing, but which they believe would be unviable because of the likely combination of Section 106 and the Community Infrastructure Levy charges.

“These contributions are prohibitive for many smaller developers, killing off thousands of otherwise viable schemes, and acting as a serious barrier to expansion.

“The threshold’s reinstatement will protect the very smallest developments from being lumbered with unaffordable requirements, allowing them to bring forward small-scale, sustainable developments, which will ultimately be of huge benefit to everyone, local councils included.”

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