Housing Secretary, Sajid Javid is facing increasing pressure to tighten planning laws after a legal loophole that housing developers have been exploiting throughout England is exposed in a report.
In the middle of one of the worst housing crisis the UK has seen in decades, a report by housing charity Shelter and the Campaign to Protect Rural England (CPRE) reveals that developers are avoiding building tens of thousands of affordable homes thanks to a legal loophole in planning laws.
Currently, developers must ensure that they provide a proportion of affordable homes (approximately 30%). However, developers have been using ‘viability assessments’ which legally allows them to negotiate the required proportion on the basis that their profit margins would be dramatically affected. If by meeting the set ratio for affordable housing, the developer’s profits are cut to below 20% then they are legally entitled to reduce the number of affordable homes they must build.
According to Shelter and CPRE some developers are purposely buying over-priced land to build on knowing that they can later recoup the extra cost by driving down the number of affordable homes they are required to build. This problem has already been prevalent in urban areas throughout the UK but concerningly, it is expanding into rural areas where more affordable housing is in desperate need.
Shelter’s Chief Executive Polly Neate, noted;
“With this new research we can see for the first time the true scale of our housing crisis – it’s not just blighting cities but our towns and villages, too. Developers are using this legal loophole to overpower local communities and are refusing to build the affordable homes they need.”
The South-West (where housing is in high demand) was an area significantly affected by the developers’ actions, with homes often selling at more than nine times the average earnings for the region. Shelter and CPRE’s report showed that Cornwall missed out on 232 affordable homes as a result of viability assessments resulting in only 26% of the quota being met rather than the expected 40%.
Manjinder Kaur Atwal is a Housing Director at Duncan Lewis Solicitors and can advise on disrepair matters and all other housing issues. For expert housing advice, contact Manjinder on 020 3114 1269 or email her at email@example.com.
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