Glenny acts for developers in negotiating affordable housing contributions

Glenny LLP were instructed to act on behalf of a retained residential developer to provide advice in respect of the development viability of a residential scheme in Essex based on the local authorities affordable housing requirements. The Councils planning policy was that any new developments of 10 or more dwellings should include an affordable housing provision of 50%. Glenny were appointed to see what proportion, if any, of affordable housing the scheme could support and still provide the developer with a suitable return in order to bring forward the development. Glenny prepared a Viability Assessment on behalf of the developer which was forwarded to the Council as part of the planning application.  Glenny presented a case that demonstrated that the proposed scheme could not (viably) provide any affordable housing contribution.  The assessment was reviewed on behalf of the Council by a national firm of surveyors who counter argued that the scheme could provide some affordable housing. Their opinion was that the Gross Development Value of the scheme adopted by Glenny was conservative and that the Existing Use Value (the benchmark value that affordability is assessed against) was too high. The developer appealed the Councils decision, with the Planning Inspectorate siding with Glenny on both points. The Inspectorate determined that the Gross Development Value reported by Glenny formed a reasonable basis for undertaking the viability assessment. It was also considered that the approach adopted by Glenny in respect of the Existing Use Value was reasonable. The Planning Inspectorate concluded that "for these reasons the scheme appears to be at the lower end of the range of viability with regard to the potential returns for the developer and landowner. Hence a requirement to include affordable housing provision could threaten the deliverability of the development and result in the benefits of new investment and new homes being put at risk. Having regard to all of these matters, I consider that sufficient information is available to conclude that it would not be viable for the appeal scheme to include the provision of affordable housing." Glenny act for a number of developers in negotiating affordable housing contributions; should you require any assistance please contact Scott Hubbard on 020 3141 3539 [email protected]