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Planning reforms could prevent smaller associations delivering homes, says G320
Proposed changes to the planning system would impact the ability of smaller housing associations to deliver homes via Section 106 and could lead to an increase in land prices, the G320 has warned ministers in a joint letter with the G15.
In a letter sent to housing secretary Robert Jenrick, the two groups warned that the government’s proposal to increase the threshold above which developers must make affordable housing contributions “would impact the ability of (especially smaller) housing associations developing good quality affordable homes in London”.
It said many members of the G320, a group of 70 small housing associations in the capital, rely on Section 106 contributions and “often take the smaller Section 106 sites that provide valuable homes to local people”.
The G15 landlords “also use schemes of less than 40-50 homes to deliver Section 106 homes for low rents”, the letter said.
As part of a raft of changes to the planning system announced in August, the government has proposed increasing the threshold from which developers have to start making affordable housing contributions from 10 units to 40 or 50 units.
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In addition to making it harder for small housing associations to deliver homes, the groups said the changes “will lead to an increase in land prices and a reliance on the open market that would compound existing difficulties housing associations face in competing with private developers for land-led sites”.
A number of housing bodies, including the Local Government Association, have already warned that some councils could see huge reductions in the number of affordable homes delivered if these proposals are introduced.
The G15 and G320 were also critical of the government’s proposal that 25% of the homes delivered under Section 106 should be First Homes, a new tenure that would see local first-time buyers offered discounts of up to 30% on market values.
The plan “threatens the development of genuinely affordable homes” and would prevent local authorities “having the freedom to plan for the diverse needs of their areas”, the letter said.
Concerns were also raised about the proposal to replace Section 106 with a new national Infrastructure Levy, which the groups said will fail to deliver on-site affordable homes.
This is because the new Infrastructure Levy will be charged based on final sales values, in comparison to Section 106 agreements, which are negotiated during the planning application process.
Similar concerns were recently raised by Kate Henderson, chief executive of the National Housing Federation, who told MPs the changes could mark a “return to the era of bolt-on estates”.
While the G15 and G320 said they “welcome government’s efforts to improve the planning system”, they also urged ministers to “reconsider some of their proposals and carefully work on the design of others”.
The Ministry of Housing, Communities and Local Government has been approached for comment.
