It’s unrealistic to demand 50% affordable housing on grey belt sites

Section 106 has historically delivered around 44% of affordable housing in England. Yet housing associations are under significant financial pressure, from building safety costs to constrained rental income.

Furthermore, when delivery partners step back and costs rise, rigid percentage targets become harder to meet. Clearly if a scheme cannot viably support 35% or 40% affordable housing in current conditions, a flat 50% expectation on grey belt land moves further away from commercial reality.

“Where sales values are lower and abnormal costs high, a 50% requirement can tip a site from marginal to undeliverable”

The revised National Planning Policy Framework now requires grey belt developments to deliver 15 percentage points above the local affordable housing requirement, capped at 50%. The need for affordable housing is undeniable, but viability is not uniform.

Land value in the South East may absorb high affordable proportions in some locations. In other regions, where sales values are lower and abnormal costs high, a 50% requirement can tip a site from marginal to undeliverable.

Add to that remediation, infrastructure, biodiversity net gain and higher design standards, and the margin narrows further. Beyond a certain threshold, increasing the affordable percentage does not produce more affordable homes. It produces fewer homes overall.

This argument is often framed as developers seeking to reduce affordable provision. That is not my experience. Most serious residential promoters want to deliver mixed-tenure schemes. But the question should not be how we enforce 50%, it should be how we structure sites so that delivery is resilient.

A more credible approach on large grey belt sites is a three-way tenure mix: one-third open market sale, one-third affordable and one-third build-to-rent (BTR).

BTR changes the delivery dynamic. It is not governed by absorption rates in the way private sale is. Forward funding agreements can unlock early infrastructure and allow phases to progress even if the sales market softens. On complex sites, that certainty can determine whether development starts at all.

And there is substantial institutional appetite: there are more than 130,000 completed BTR homes in the UK and close to 300,000 in the pipeline, with around £3bn invested in the first nine months of 2025 alone.

Bringing BTR alongside market sale and affordable housing widens the capital base. It spreads risk across tenures. It allows phasing to flex. Crucially, it reduces reliance on a single exit route for affordable units at a time when registered providers are under pressure.

A 33/33/33 structure (market sale/affordable housing/BTR) is not about diluting ambition on affordable housing, it is the ideal way to deliver tenure diversity that supports delivery, placemaking and long-term stewardship.

An excellent example of this is Buckler’s Park in Crowthorne, Berkshire. LRG’s New Homes and BTR divisions helped deliver this exemplar mixed-use community, which is set in an area of natural and historical beauty and offers a full range of amenities to serve the privately owned, social rent and BTR homes.

“A rigid 50% requirement on grey belt sites may satisfy a headline but it will not necessarily satisfy delivery”

As Buckler’s Park demonstrates, large-scale sites work best when they are mixed from the outset. Market sale brings diversity of tenure and supports values. Affordable housing addresses acute need. BTR introduces professional management and consistent standards, helping to sustain community facilities from early occupation.

Where early phases are half-built or delayed, developers face multiple problems: confidence in development erodes, local scepticism grows and infrastructure lags behind occupation. A tenure mix that accelerates build-out and occupation is an ideal placemaking strategy. Grey belt policy was introduced to unlock land and accelerate delivery and bringing BTR into the mix does exactly that.

None of this is an argument for abandoning affordable housing requirements. It is an argument for aligning them with viability and with the realities of capital markets. A rigid 50% requirement on grey belt sites may satisfy a headline but it will not necessarily satisfy delivery. In many locations it will simply not stack up once infrastructure, remediation and modern standards are accounted for.

On grey belt land in particular, the test should not be whether we can mandate 50% but whether we can create a structure that gets homes built, keeps schemes moving and produces balanced communities over time. That is where a combination of market sale, BTR and affordable housing proves its worth.

Tim Foreman, managing director of land and new homes, LRG