Developer pulls applications over "spectre" of 50% affordable housing proposal

The country's largest housebuilder has decided to withdraw a series of planning applications due to concerns about the Government's plan to include a 50% affordable housing requirement for green belt sites under an updated National Planning Policy Framework (NPPF).

In a consultation launched last month, the Government revealed a list of proposed changes to the NPPF, which included the 50% affordable homes reform, alongside the reintroduction of mandatory housing targets, the inclusion of 'grey belt' land and the requirement for councils to conduct green belt reviews where they are not meeting their housing targets.

The policy changes are angled at achieving the Government's target of building 1.5m new homes by 2029.

However, Philip Barnes, Group Land Director at Barratt Developments, warned that the affordable housing policy would deter developers from building on green belt land.

In a blog post published last week (28 August), he said that Barratt has pulled three "in-flight" planning applications being prepared on draft allocated sites "because the spectre of 50% renders the scheme unviable due to the unacceptably reduced (or removed) land value for the landowner".

According to Barnes, existing green belt sites in a draft local plan allocated for housing "will not be able to provide 50% affordable housing".

He added: "Even a Reg 18 plan will have been viability tested against a lower affordable housing percentage, so a change to the 50% affordable 'ask' will upend the whole plan.

Barnes, who said he has discussed the changes with "peers, public and private sector planners, land agents, lawyers, land promoters and landowners", also raised questions about the consultation's land value proposals.

"Everyone seems to be in full agreement – namely that the proposed disruption to the land market is likely to cause many in-flight schemes to be abandoned and stymie many other upcoming projects," he said.

"Why? Because many landowners aren't going to sell their land in such a policy environment."

Barnes added that the 50% affordable homes requirement would hobble the new measures concerning 'grey belt' sites, which the Government defines as previously developed land within the green belt or green belt parcels that contribute minimally to the five primary green belt purposes.

He said: "Grey Belt summary = fantastic policy, at long last focusing new land releases in the most sustainable locations.

"But delivery challenges unless there is a realistic approach to the land market."

Barnes also raised concerns about the consultation's proposals regarding setting a national benchmark land value.

The document does not settle on specific figures, but suggests introducing benchmark land values for the purposes of viability-testing local plans and planning applications.

He said: "The consultation document assumes that the existing use value of agricultural land is c.£20-25,000 per hectare or £8000-£10,000 per acre.

"So, if we assume the Government is aiming at x10 agricultural value they are expecting landowners to sell land for £100,000 per acre.

"Other than on larger sites, 100k will not happen in many places and I won't spend time justifying that statement, with reference to the obvious issues such as capital gains tax, revenue vs capital, and long-term perspectives.

The NPPF consultation began on 30 July and closes to responses on 24 September.

Adam Carey