Regulation 19 Rutland Local Plan

Ends on 2 December 2024 (25 days remaining)

Affordable Housing

What will the policy do?

The policy sets out a requirement for a minimum of 30% affordable homes to be provided as part of developments of 10 or more homes in the parishes of Oakham and Uppingham, and on sites of 6 or more homes in all other parts of the County. The policy prescribes how affordable homes should be incorporated into a development scheme and what they are expected to include.

Policy H7 - Affordable housing Comment

All major residential developments comprising 10 or more dwellings (or with a site area of 0.5 hectares or more) will be required to make provision, onsite, for a minimum of 30% of the scheme's total capacity as affordable housing.

This includes development incorporating Use Class C2 supported housing, where these meet the Council Tax definition of a dwelling.

On brownfield sites, consideration will be given to the application of vacant building credit.

In the Designated Rural Areas (all parishes outside Oakham and Uppingham parishes) developments of between 6 and 9 dwellings inclusive will also be required to make affordable housing provision for a minimum of 30% of the scheme's total capacity. In Designated Rural Areas, developments of between 6 and 9 dwellings inclusive may make contributions in the form of off-site contributions unless a relevant neighbourhood plan requires provision to be onsite.

Otherwise, in accordance with the NPPF, the Council will only accept affordable housing provision off site; or as a commuted sum in lieu of onsite provision, only where it is robustly justified and where the agreed approach contributes towards creating mixed and balanced communities.

The affordable housing requirement together with all other policy requirements in this plan have been assessed as being viable for the development types and sites allocated in this plan, therefore it is assumed that all development proposals will be viable. In exceptional circumstances, where robust evidence demonstrates that the specifics of an individual site and scheme justify the need for a viability assessment, consideration may be given to this at the planning application stage. The Council will follow national guidance (set out in national PPG) to determine the exceptional circumstances where a site-specific viability appraisal might be accepted. In such cases the viability assessment should be prepared in accordance with the approach set out in national planning guidance and will be made publicly available. Independent verification of the viability assessment will be sought by the Local Planning Authority and the cost of this work will be borne by the applicant. The Council will determine how much weight it gives to the viability assessment in each case.

Affordable housing must:

  1. be of a combination of sizes and affordable tenure which meets the proven local affordable housing need, including the number of bedrooms, property type and floor space;
  2. include at least two-thirds of affordable housing will normally be affordable housing for rent and the remainder will be affordable home ownership, both within the definition in Annex 2 of the NPPF, with the exception of First Homes Exception Sites where a more flexible approach can be taken through Policy H9 (First Homes Exception Sites);
  3. ensure that where major development is proposed, as part of the overall affordable housing provision, at least 10% of the total number of homes to be available for affordable home ownership, unless a contrary approach is justified by the relevant paragraph of the NPPF;
  4. achieve a minimum of 25% of all affordable homes secured through developer contributions as First Homes (with the exception of Oakham and Barleythorpe whilst they are covered by their Neighbourhood Development Plan which was 'made' on 24 June 2022), unless a contrary approach is justified by the relevant paragraph of the NPPF;
  5. where affordable home ownership is included, as part of the overall affordable housing provision, ensure the properties meet a range of relevant local demand and local affordability;
  6. be equivalent in standard and siting to typical open market properties of the same floorspace/number of bedrooms/general type;
  7. be well integrated with the open market housing through layout, siting, design, and style (to promote sustainable communities, the size and location of groups of affordable homes should be discussed and agreed with the Council);
  8. on very large sites (of 100 or more homes) affordable homes should be in groups of no more than 10 homes in different locations around the site;
  9. homes for ownership, other than flats and shared ownership, should be available on a freehold basis and not subject to leasehold arrangements; and
  10. be supported by appropriate nomination agreements to be agreed with the Council.

The Council may refuse development proposals which, in its opinion, seek to under-develop or split sites in a way that is likely to reduce the affordable housing contribution and/or promote off-site provision.

Why is this policy needed?

An adequate supply of housing which is affordable for local incomes is an essential part of creating sustainable communities and helps to support a thriving local economy and promote social inclusion. The planning system plays a central role in increasing the supply of affordable housing by creating mixed and balanced communities.

Rutland suffers particular problems regarding affordable housing, having some of the very highest average house prices in the region and a high proportion of large houses. The main method by which the planning system can help is by requiring developers to provide or contribute towards affordable housing as part of their developments and by allowing small developments solely for affordable housing as an exception to normal planning policies. The Council is required by the NPPF to meet the need for both market and affordable housing in its housing market area and policies for affordable housing should specify the type of affordable housing required. Other than in prescribed circumstances it is expected that affordable housing will be delivered on site.

Affordable housing is defined in the NPPF (2023) as housing for sale or rent for those whose needs are not met by the market (including housing which provides a subsidised route to home ownership and/or is for essential local workers). The NPPF goes on to define the following groups which meet this:

The NPPF provides a definition of each of these categories and should be consulted for clarity. Further details can also be found on the Council's website: https://www.rutland.gov.uk/housing/new-affordable-homes              

The Housing Market Assessment (HMA) (2023) for Rutland analyses the need for affordable homes in all categories of the definition and has split this analysis between a 'traditional' need (which is mainly for social/affordable rented accommodation and is based on households unable to buy or rent in the market) and the 'additional' category of need introduced by the revised NPPF/PPG (which includes housing for those who can afford to rent privately but cannot afford to buy a home). The HMA concludes that there is an annual need for an additional 78 "traditional" affordable housing units per year. There are many households in Rutland who are being excluded from the owner-occupied sector. It is also clear that there are a number of households likely to be able to afford to rent privately but who cannot afford to buy a suitable home. The analysis would therefore suggest that a key issue in the County is about access to capital (e.g., for deposits, stamp duty, legal costs) as well as potentially mortgage restrictions (e.g., where employment is temporary) rather than simply the cost of housing to buy. The HMA is inconclusive about the scale of the need for affordable home ownership but carries out further analysis based on an assumption of 36 additional affordable homeownership properties being needed per year.

Delivery

Under Policy H7, one-third of affordable housing will normally be affordable home ownership and the remaining two-thirds will be affordable housing for rent, both within the definition in Annex 2 of the NPPF. Policy H7 allows two over-lapping requirements in national planning policy to be met. Under paragraph 66 of the NPPF, 10% of the total homes on a major housing development (sites of 10 or more homes or of 0.5 hectares or more) should normally be available for affordable home ownership. Under the Written Ministerial Statement on First Homes, at least 25% of the affordable homes secured through developer contributions on a site should normally be First Homes.

In order to meet this need, Policy H7 sets out a requirement for a minimum of 30% affordable housing on new housing developments which meet the thresholds established by national planning policy. Onsite affordable housing is therefore normally required on all major housing proposals with a capacity for 10 dwellings or more, or where the site has an area of 0.5 hectares or more. With the exception of the parishes of Oakham and Uppingham, all parishes in Rutland are 'Designated Rural Areas' under Statutory Instrument 2004/418. In these locations, housing proposals for six to nine dwellings will also be required to make provision for affordable housing which will normally be in the form of a commuted sum for off-site affordable housing provision.

Affordable housing is required from development incorporating Use Class C2 supported housing, where these meet the Council Tax definition of a dwelling. Paragraph 6.60 of the HMA states, "…it should be noted that in July 2020 the High Court rejected claims that 'extra care' housing should not contribute affordable homes because it falls outside C3 use (CO/4682/2019)."

In accordance with NPPF affordable housing provision should be made on-site unless the off-site provision or an appropriate financial contribution can be robustly justified, and the agreed approach contributes to the objective of creating mixed and balanced communities. Where commuted sum payments in lieu of onsite provision are robustly justified, these will normally be used for providing affordable housing within the vicinity of the development site. Otherwise, they will be pooled towards providing affordable housing elsewhere in Rutland. The sum payable will be calculated where practicable on the basis of the requirements set out in high level viability modelling and will vary according to the locality and circumstances of each site.

The Council's policy – and the calculation method used – is based on the commuted sum being broadly equivalent to the cost of on-site provision and will therefore contain elements of the construction and services cost as well as the land cost.

Demonstrating viability

The Whole Plan Viability Assessment (2023) assesses the viability of this requirement for a range of site types and locations in the County. The report concludes that this level of affordable housing should be viable across most site typologies. It is therefore assumed that the affordable housing requirement is viable and deliverable on all sites unless exceptional circumstances are demonstrated. The Council will use the guidelines set out in the national PPG to determine whether exceptional circumstances apply to a specific proposal. Only in such circumstances will a site viability assessment be considered. The Council may have a viability assessment independently appraised. Where this occurs the cost of the appraisal will be borne by the applicant. In accordance with the NPPF, affordable housing should be provided on site on major development proposals. The general presumption will be that the cost of providing affordable housing will be offset in the negotiation of the land purchase or option. The land value should include all costs including planning gain requirements. On larger sites affordable housing delivery may be phased over the lifetime of the development.

Supporting Evidence

Whole Plan Viability Assessment (October 2023)
Housing Market Assessment (August 2023)
Designated Rural Areas Order 2004
National Planning Policy Framework (2023)
Oakham and Barleythorpe Neighbourhood Plan (June 2022)

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