Inspector approves removal of Lancashire scheme affordable housing contribution

Out-Law News | 21 May 2014 | 4:00 pm | 1 min. read

A planning inspector has allowed an appeal for the removal of an obligation requiring the developer of a housing scheme in Oldham to make a £283,000 financial contribution towards affordable housing.

Oldham Metropolitan Borough Council granted planning permission to developer Tamewater Developments Limited in 2008 for a 46-home scheme at Dobcross in Oldham. The permission was subject to an obligation requiring Tamewater to make four instalments of payments to the Council in lieu of the provision of affordable housing.

The developer had already made the first payment of £100,000. It applied to have the remaining contributions removed under provisions introduced by the Growth and Infrastructure Act 2013. The provisions allow for applications to be made to vary affordable housing requirements contained in a planning obligation if those requirements make the scheme unviable.

The inspector said in the decision notice that Tamewater's viability appraisal included "reasonable" figures which showed that the development is currently economically unviable (6-page / 78KB PDF).

The inspector said that, even if all the outstanding affordable housing contributions were removed, the scheme would not return to full economic viability. It would however allow the developer to cover his losses and allow the scheme to be fitted out and completed, the inspector said.

The inspector noted that build-out of the scheme had continued and that it was not "completely stalled". However, a viability assessment to satisfy the requirements of the 2013 Act was based upon the project and not the wider means or motivation of a particular developer, the inspector said.

"A developer may have reasons for continuing with an unviable scheme, for example to recoup as much sunk investment as possible so as to reduce a loss. The Act simply refers to the question of whether the scheme is economically viable or not," the inspector said.