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Planning inspector reduces affordable homes requirement for 1,100-home Gloucestershire scheme

Out-Law News | 10 Sep 2014 | 5:08 pm | 1 min. read

A planning inspector has decided that the affordable homes requirements in planning obligations for a 1,100-home residential scheme in Gloucestershire should be reduced, after determining that it rendered the proposed scheme unviable.

Forest of Dean District Council granted outline planning permissions in 2008 and 2010 for proposals from developer Robert Hitchins Limited (RH) to build up to 1,082 homes, a neighbourhood centre, employment land and school sites across two sites near the Lydney Bypass in Lydney. Planning agreements relating to the permissions required affordable housing provision of 20% at the 332-home 'Lydney A' site and 30% at the 750-home 'Lydney B'.

The Growth and Infrastructure Act introduced a procedure enabling developers to apply for affordable housing requirements in planning obligations to be modified, removed or replaced where they render a development economically unviable. The developer applied to the Council to remove the obligation under the new procedure in December 2013. When the Council failed to determine the application, RH applied directly to the Planning Inspectorate to determine the application.

In a decision dated 3 September (8-page / 114 KB PDF), planning inspector Christina Downes concluded that "the requirement for 20% affordable housing on Lydney A and 30% on Lydney B would not be viable and on this basis I am satisfied that the development will not proceed". However, the inspector determined that there was "no justification to remove the affordable housing requirement altogether" and instead applied a modified affordable housing requirement of 14.1% across both sites.

In coming to her decision, Downes preferred RH's estimation of the likely sales values at the proposed development, finding that the Council's district valuer included too high a proportion of smaller units in his own calculations, resulting in an inflated value per square foot of development. The inspector also found the Council's estimate of the likely rate at which homes would be sold was "likely to be overly optimistic", and accepted the developer's contention that a 20% profit requirement would be the "minimum on which finance could be obtained."

Applying a sales value of £170 per sq ft, a sales rate of 4.7 units a month and a minimum profit level of 20%, the inspector decided that "the available evidence shows that the development would become viable with a modified affordable housing requirement of 14.1% across the two sites".