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The Mayor of London's Affordable Housing SPG: 10 things you need to know (part 2)

30 August 2017

This supplementary planning guidance, issued this month, builds on the Mayor's long-term aim for half of all new homes in London to be affordable (as defined in the London Plan).
More will no doubt be heard in the revised London Plan when that emerges, but in the meantime here are some headlines which we hope help you cut through the SPG.

Part 1 of this blog post can be found here.


6. Financial information is more likely to be made public

The Mayor is keen for the system to be transparent. This means that where schemes are relying on viability arguments, it is likely that this financial information will enter the public domain. Where information is particularly sensitive, applicants can request that it remains confidential, but this is only likely to be accepted in very exceptional circumstances, where disclosure would cause harm to the public which would not be outweighed by the benefits of transparency. Applicants will also have to provide the authority with the full working model and/or all assumptions and calculations used in their assessment, together with detailed evidence to support the inputs.

7. There's a risk attached if applicants offer less than 35%

If an applicant claims that 35% affordable housing without public subsidy is not achievable, that claim will be scrutinised by the planning authority and sometimes the Mayor. Where those parties consider that more is viable than is proposed, they can require more to be provided, and that requirement can exceed the 35% level. A maximum 50% is suggested, although reference can instead be made to the relevant local authority's affordable housing target. This increased provision could be required at an initial stage, or as part of a review which takes place during the build process.

8. Applicants will have to engage early with registered providers

The SPG requires that 'in all cases' the applicant should work with registered providers at an early stage and also consider whether they can access grants or other funding in order to increase their proposed level of affordable housing. Registered providers should be asked to commit to the provision at an agreed purchase price.

9. The Mayor has suggested a tenure split too

In an effort to secure the homes which London needs, the SPG sets out a preferred tenure split of:

  • at least 30% social rent or affordable rent (using London Affordable Rent as the default level);

  • at least 30% intermediate (using London Living Rent and/or shared ownership as the defaults); and

  • 40% to be determined by local planning authorities

The SPG acknowledges that where 35% affordable cannot be provided, considering a different tenure split will be the starting point for negotiations.

10. Different rules apply to build to rent homes

Build to rent homes, as newly defined in the SPG, are encouraged and it is recognised that their economics differ from build for sales schemes. As such, all build to rent schemes will be subject to viability testing, to determine the maximum amount of affordable housing that can be provided. We cannot cover all aspects of this part of the SPG in this blog post, but should mention that the Mayor recognises that affordable units within a build to rent scheme can be discounted market rent (DMR), managed by the build to rent landlord rather than a registered provider or local authority. There is a preference for such units to be let at London Living Rent levels.