6 August 2016 – by Louisa Clarence-Smith

A new definition of “affordable” will be brought forward as part of planning guidance released in the autumn, London’s deputy mayor for housing James Murray has revealed.

The new definition will be announced alongside a new, clear methodology for viability assessments and a non-negotiable fixed affordable housing tariff, giving developers the option to avoid viability assessments altogether.

Asked about the possible exemption of build to rent schemes from starter homes requirements, Murray told Estates Gazette he was keen to exempt starter homes from build to rent and will be making the case to government.

The policy overhaul is designed to allow mayor of London Sadiq Khan to start delivering on his campaign pledge to make 50% of new homes delivered in the capital “genuinely affordable”.

Supplementary planning guidance allows the Greater London Authority to shape the existing London Plan inherited from Boris Johnson. Khan’s team has started the process of rewriting the development strategy document, but with public consultations and government approval, the process is expected to take two years.

Will build-to-rent schemes be exempt from starter homes?

Murray said he was concerned about the viability of build-to-rent schemes made subject to a starter homes requirement.

He said: “On-site provision of starter homes or even commuted sums for starter homes would seriously impact on their viability, so we are concerned about that and we will be making the case that the starter homes requirement, should it come forward more generally, certainly should not apply in that way to build-to-rent.”

How the response to starter homes policy is worded in the planning guidance will depend on whether the government has published the regulations in time.

How would a 35% fixed affordable housing contribution be implemented?

Estates Gazette revealed on Friday that City Hall was consulting developers and boroughs on a 35% flat rate affordable housing tariff. Murray said a fixed rate would give developers the option to opt out of the viability process to help speed up planning permissions.

He said the exact level of the fixed rate would be confirmed in the autumn but conceded that there needed to be an incentive for developers to go for the fixed contribution, rather than the viability route.

He said: “We are going to have to have those discussions over the summer and work out exactly where the number might land.

The end of viability assessments?

The move will not mean the end of viability assessments completely, since in the current London Plan viability is central to its determination of planning applications. But through the supplementary planning guidance the mayor’s office does have powers to set out clearer guidelines for how to approach viability.

Murray said the lack of “clarity or consistency” across London about which methodology was being used to assess viability was causing conflict between applicants and local planning authorities, and slowing down developments.

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