With the arrival of the newly published National Planning Policy Framework earlier this week, the Ministry of Housing, Communities & Local Government have updated their guidance on viability and we have put together a brief summary of what we think are the key points:
6. The new guidance repeatedly refers to the fact that ‘under no circumstances will the price paid for land be a relevant justification for failing to accord with policies in the plan.’ This move is clearly intended to prevent instances like in the case of Parkhurst Road Ltd v Secretary of State for Communities and Local Government and London Borough of Islington in which the former territorial army centre on Parkhurst Road was acquired for £13.25 million and the developer claimed that it was not viable to provide the amount of affordable housing required by policy instead insisting that it could not provide more than 10%. Islington Council countered that the cost of the land should have been no more than £6.75 million and if that figure was input into the viability calculation the developer would have been able to build more affordable housing. The Council were successful at the High Court but, after years of litigation, the site has remained empty and much needed housing supply has not come forward.
7. Further clarity is added by the new guidance as to how Benchmark Land Value (BLV) should be calculated. It should be based on:
Following the High Court decision in 2002 concerning the Arsenal Football Stadium, viability assessments submitted by developers to planning authorities have been treated as confidential. Leading to some local authorities even restricting the assessments from view of the planning committee members. This practice became hugely controversial, an example of which is the Heygate Estate, which saw the demolition of 1,000 socially rented homes to be replaced with just 74, plus intermediate housing, fuelled public anger.
In response, the new Guidance now states that viability assessments must be publicly available.
Where an LPA is satisfied that a viability report contains information that is commercially sensitive, such as information connected to negotiations over purchasing the land are still underway, the full report will not need to be made publicly available but an executive summary will need to be produced instead.
The above is just a brief overview of what the team of Planning Law specialists at Holmes & Hills Solicitors believe are the important points arising from the guidance. For further detail, we recommend reading the guidance document which is available to view in full here.
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