Government policy for small housing sites to be free of obligation to provide affordable housing or other 106 tariff style contributions, has been upheld by the Court of Appeal.

In July 2015, West Berkshire District Council and Reading Borough Council initially succeeded in the High Court in challenging the written ministerial statement of 28 November 2014 made by Brandon Lewis. It stated that housing developments of under ten units, or 1,000sqm, should not contribute to affordable housing or pay tariff style section 106 contributions. A lower threshold of five units applied to designated rural areas, albeit with a contribution in lieu attaching the schemes of six to ten units.

The Councils’ challenge, motivated chiefly by the potential loss of affordable housing, was made by the Councils’ on several grounds. This included those reflecting the general concern expressed by a number of authorities that the Government should not be able to make such significant changes to policy without going through a more robust and consultative process.

The Government appealed the High Court’s decision. Following a hearing in March of this year, the Court of Appeal handed down its judgement on 15 May 2015, allowing the Government’s appeal on all grounds.

The Court of Appeal concluded that the minister’s statement could lawfully be expressed in mandatory terms, without the need to expressly set out qualifications or exceptions, and that the High Court had wrongly concluded that lawful planning policy must express its openness to exceptions.

The Court of Appeal also concluded that whilst the statutory regime does to some extent constrain the Secretary of State, planning policy choices are for the Secretary of State. Planning legislation ‘does not lay down merits criteria for planning policy, or establish what the policy-maker should or should not regard as relevant to the exercise of policy-making’. In addition, the Court of Appeal also decided that it was not necessary for the Secretary of State in his response document to explain why he settled on a threshold of ten units instead of, say, three, saying that the requirements of a fair consultation do not require a detailed analysis of options before the Minister.

According to the Government, this is an important decision that will enable small builders and developers to contribute to the delivery of more homes, and means affordable homes contributions will fall to those bigger developers building the largest sites – leaving smaller builders developing sites of 10 homes or fewer, able to avoid additional costs that may mean they are unable to build any homes at all.

Other planning policy considerations will apply especially in relation to sustainability, but if you are a developer or landowner who has mothballed a small residential site previously made unviable by planning obligations, please contact Claire at Ellisons to see how we can assist you in getting permission for a residential free of onerous obligations.

Email Claire Barritt on [email protected]

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