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‘Off-site’ affordable housing requirements need more clarity

Last year in our report Home Truths, we made it clear there is no simple solution to London’s lack of housebuilding – increasing supply requires action on multiple fronts.

Off site cover

One aspect of this challenge is to increase the consistency and transparency of the planning process in relation to affordable housing, which would help to get more homes built.

In our new report, The Off-Site Rule, written with the planning consultants Turley, we call for a clearer system in London for the off-site construction of affordable homes and payments by developers to planning authorities in lieu of building affordable housing.

In London there is a lack of consistency and transparency in the circumstances in which either off-site construction or a payment in lieu is allowed.

A similar scheme with similar circumstances incorporating either off-site provision or a payment in lieu may be accepted in one borough, but not in a neighbouring borough, which makes the system unpredictable and difficult to navigate.

Greater certainty would help to deliver more affordable homes.

Greater clarity about off-site delivery

The report says that the presumption in favour of affordable homes being delivered on-site should remain. However, there is need for greater clarity about the acceptability of building affordable housing off-site where it can be clearly demonstrated that this would result in better outcomes, either in terms of the quality, quantum or type of homes delivered.

It outlines some criteria which could act as a starting point for a developer and local planning authority to assess the suitability of off-site delivery. This would take into account a number of factors such as: land values; the physical constraints of the site; and the type of housing needed in the local area.

More transparency about payments in lieu

The report says that more transparency is required about how local planning authorities use the payments in lieu of affordable homes they receive which are sometimes included in a Section 106 Agreement.

A new regime should be introduced which standardises how they are calculated, monitored and used. In particular, it says that local planning authorities should be given a fixed time limit of three years to commit funds to affordable housing projects – or the money should be transferred to the Mayor to be used in one of the GLA’s affordable housing programmes.

Cross-boundary co-operation

The report also suggests that the Greater London Authority could have a bigger role to play helping London’s boroughs to deliver more affordable homes. Administrative lines drawn on a map differentiating one borough from the next do not always reflect the geography of local housing markets which can straddle political boundaries.

Off-site delivery and payments in lieu both raise issues of cross-boundary delivery. Typically, but not exclusively, this relates to central London schemes that could support more homes in other parts of London where there is more space to accommodate housing growth and lower land values mean increased output. There could be a role for the GLA, with its London-wide remit, to facilitate the cross-boundary provision of new affordable homes, but this would need clear rules and transparency, particularly in how nomination rights between boroughs are addressed.

The introduction, in the Housing and Planning Bill, of the right to buy for housing association tenants (funded by the sale of high-value council homes) also has implications for cross-boundary provision. The Bill, currently being debated in Parliament, was amended to require the 2 for 1 replacement of every high-value council home sold in London. There is a lot of uncertainty about the detail of this process. However, if it is to work it would seem likely that boroughs will have to work with the GLA, and possibly other partners, to facilitate the construction of the homes across the whole of London.

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