23.04.2025
Four months on from the publication of the revised NPPF in December 2024, the industry is still waiting for the Government’s promised updated viability planning practice guidance. DHA's Danielle Lawrence looks at the implications of the ‘Golden Rules’ on development viability.
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Until the Government provides its further update on the Golden Rules you would not be wrong to assume that there is effectively a blanket ban on site specific viability assessments for major development within the Green Belt (PPG para 029).
Whilst updates are rumoured to be imminent developers are continuing to face financial pressures which is threatening the viability of schemes. It is therefore inevitable that the current PPG is preventing some sites from coming forward, particularly where there maybe contractual issues such as minimum land prices.
It is worth noting that the NPPF defines ‘major development’ for housing as ’10 or more homes, or a site area of 0.5 hectares or more’. This does not therefore preclude viability assessments being undertaken on non-major developments. This is particularly relevant for local authorities with adopted affordable housing policy requirements for smaller sites.
For example, Sevenoaks District Council’s Affordable Housing SPD (as updated in October 2024), requires developments of ‘6-9 homes, irrespective of site size’, to provide 20% of the homes as affordable, by way of a financial contribution. So should planning applications come forward on Green Belts sites for a development of this scale (but less than 0.5 hectares), then a viability case could be still submitted as it would not be required to meet the ‘Golden Rules’.
Appeal decisions have started to come through which is giving the industry some clues as to where the decision makers are heading and there are a few worth noting which we have summarised below.
The Inspector granted outline planning consent (will all matters reserved except for access) for 145 C2 (extra care) dwellings on 25th March 2025.
The Appellant had proposed that 10% of the dwellings be sold at a 20% discount of open market value, alongside a financial contribution of circa 5% (£1,015,826) to be directed towards housing need for the Borough. The Inspector concluded that whilst the scheme does not include 50% affordable housing, as required by paragraph 156(a) of the NPPF, the local demand leans towards the provision of market dwellings (as confirmed by local housing market evidence) and therefore the Inspector attributed moderate wait towards the inclusion of 15% affordable housing (paragraph 134).
Overall, the Inspector concluded that the benefits of the appeal scheme would significantly and demonstrably outweigh the harm.
On 26th March 2025, detailed planning consent was granted at appeal for the demolition of existing structures and the construction of five detached houses.
The proposal constituted ‘major development’ as defined by the NPPF, by virtue of the site area and as such, the ‘Golden Rules’ were a consideration.
The Appellant had submitted viability information which concluded that the scheme was unable to support affordable housing. This information was independently reviewed and accepted by the Council and as such, the first ‘Golden Rule’ would not be met.
Notwithstanding this, the Inspector attributed moderate harm to the failure to comply with the ‘Golden Rules’ on the basis of the significant benefits being delivered by the scheme, including housing in a District where there was a serious shortfall (1.9 years).
So, whilst we await the updated Viability guidance, there are some signs that Inspectors are deviating from the 50% requirement. This is however subject to the Inspector’s assessment of the planning balance and should be viewed with extreme caution!
DHA’s Viability Team are continuing to monitor the situation and will provide further updates as they become available.
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