The right amount of affordable housing

How much affordable housing can a local planning authority reasonably require? Hugh Flanagan reports on the outcome of an important appeal.

A significant appeal decision has been issued on how to assess the amount of affordable housing which a development can support. It will be of interest to developers and authorities involved in negotiations over affordable housing contributions. It is also highly relevant to the new power to modify s.106 agreements on the basis that an affordable housing requirement makes a development unviable (s.106BA).

The appeal decision at 279 King’s Road, London concerned a proposal for redevelopment of the existing Cineworld cinema and retail units to provide a new cinema (with Everyman earmarked as the tenant), retail units and 11 residential units. The parties were at odds on the right amount of affordable housing: the appellant’s financial viability assessment indicated that no affordable housing could be provided; the Royal Borough of Kensington and Chelsea’s assessment found that a significant contribution could be made – in the region of £2m.

This difference gave rise to a wider policy issue. The London Plan requires that LPAs should seek the “maximum reasonable amount of affordable housing” (3A.10). The appellant argued that provided its figures (in particular inputs such as construction costs and sales values which determine whether the development is viable) are within a reasonable range, the policy is complied with.

The Inspector rejected this “reasonable range” approach to the policy. She held that a definitive choice needed to be made as to which figure advanced by the appellant’s and the council’s respective experts was the “most reasonable”. This is particularly so because small changes in the inputs can cumulatively lead to a large change in overall viability.

After a three day inquiry, the Inspector found that there was a surplus of over £1m. Accordingly, the appeal was dismissed.

A copy of the appeal decision can be found here.

Hugh Flanagan is a barrister at Cornerstone Barristers and appeared for the successful LPA. He can be contacted on 020 7242 4986 or This email address is being protected from spambots. You need JavaScript enabled to view it..