Half the homes built on public land in London will need to be affordable and developers who fail to build out in two years will be penalised, according to the final London Supplementary Planning Guidance.
With the launch of the guidance, laid out in draft last year, mayor Sadiq Khan has also urged London councils to make use of City Hall’s viability team if developers try to reduce affordable housing levels.
Khan said: “I’m determined to ensure we don’t have a repeat of what happened at Battersea Power Station, with developers unacceptably reducing the number of affordable homes on site after planning permission was granted.”
The mayor has no formal powers to intervene when councils have made a decision, but he is pushing for a greater role after Battersea’s developers reduced the level of affordable housing by 40%.
Concessions in the planning system for build to rent schemes have also made it into the final draft.
The final SPG confirms developers will be able to avoid viability assessment if they meet the 35% affordable threshold, a figure which rises to 50% on public land.
Khan’s intention is to raise affordable housing levels from the 13% achieved under Boris Johnson.
The guidance also says developments not starting within two years will face detailed scrutiny of their financial modelling. Those not meeting minimum affordable thresholds face further scrutiny as they near completion – with a share of any unexpected profits being reinvested in more affordable housing.
Khan said: “The housing crisis is the biggest challenge facing Londoners today with too many people – particularly the younger generation – being priced out of our city, unable to afford a home.”
British Property Federation director of policy Ian Fletcher said: “We think the mayor is right to seek to build as much affordable housing on public land as he can, to the extent that it is also delivering the infrastructure needed and communities that people want to live in.
“On private land, affordable housing obligations are often one of many developer contributions, and for the sake of all involved it is important that the process is fair, time and priority conscious, and well-informed. We therefore support the expertise on planning and viability the mayor is establishing in City Hall and would encourage its use.”
The final plan has also kept many of the concessions gained for build to rent developers, recognising that if developments meet certain criteria they can pass more quickly through the planning process.
The plan states: “To encourage the development of this type of housing, the London Plan has made clear that LPAs should recognise the distinct economics of the sector relative to mainstream ‘build for sale’ market housing, and should take account of this when considering planning applications for build to rent schemes.”
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