Published: 16th October 2024
Area: Social Housing

Contents

The National Planning Policy Framework (‘NPPF’) consultation 2024, which closed on 24 September 2024, proposed several significant changes to planning policies, with a particular focus on social and affordable housing.Two of the most notable suggestions were the potential alteration of the 10% requirement for affordable homes on major development sites, and the removal of the minimum 25% requirement for social housing.We examine the implications of the proposed changes, as well as providing commentary on the broader suggestions for social and affordable housing within the consultation.

A: Before, and Now

Affordable housing policy in the UK spans many decades, going as far back to 1949 when The Housing Act introduced council housing on a large scale. However, it wasn’t until 1980 that The Right to Buy scheme was introduced, allowing council tenants to purchase their homes discounted.

Three further milestones are worth noting in order to further set the historical context regarding affordable housing policy:

Key Events in UK Housing Policy
Year Event
1990 The Town and Country Planning Act introduced Section 106 agreements, enabling local authorities to secure contributions from developers for affordable housing.
2012 The first National Planning Policy Framework was published, setting out national planning policies for England.
2018 The Social Housing Green Paper was published, promising a “new deal” for social housing residents.

The UK has witnessed a gradual shift from direct state provision of affordable housing to a more market-led approach, with developers playing an increasingly important role.

Under the existing NPPF, local planning authorities are expected to require that at least 10% of homes on major development sites (typically defined as sites of 10 or more homes) be available for affordable homeownership and additionally, there has been a requirement that a minimum of 25% of all affordable housing units secured through developer contributions should be First Homes.


B: Implications of the Proposed Changes

The NPPF Consultation proposed changes to affordable housing requirements would have wide-ranging implications across various aspects of housing policy and development, which are explored below by focus area:

(i) Local Authority Control and Flexibility

The Consultation’s proposed adjustments could allow for more tailored approaches to meet local housing needs, as different areas have varying demands for affordable and social housing. It is perceived that the increased flexibility might enable local authorities to better align affordable and social housing requirements with their specific local plans and housing strategies.

However, it is also possible that this flexibility might lead to significant variations in social and affordable housing provision across different local authorities, potentially exacerbating regional inequalities. Local authorities therefore need to radically rethink their housing strategies to ensure an adequate supply of social housing in the absence of a national minimum requirement, which could strain already stretched local government resources.

(ii) Housing Supply and Mix

The Consultation’s proposed changes could potentially lead to an overall increase in housing supply, as removing strict requirements might make more developments financially viable. There is also the possibility of higher overall affordable housing provision if the 10% requirement were to be increased.

On the flip side, removing the 25% minimum requirement for social housing could lead to a significant decrease in the provision of homes for those most in need, exacerbating the existing housing crisis for the most vulnerable. A careful balancing exercise will be required to avoid the risk that new developments could skew towards more profitable forms of affordable housing, such as shared ownership, at the expense of social rent properties.

(iii) Developer Considerations

The proposed changes in the NPPF Consultation could certainly improve viability for developers, particularly in areas where current requirements make projects financially challenging. A more flexible approach could also enable quicker responses to changing market conditions and local needs.

However, there is a risk that developers might seek to exploit any increased flexibility to minimise their social and affordable housing contributions, particularly in high-value areas. This could lead to an imbalanced housing mix that doesn’t adequately address community needs.

(iv) Social Integration and Community Cohesion

Changes to the mix of social, affordable, and market-rate housing in new developments could significantly affect the social fabric of communities. Research from the Joseph Rowntree Foundation suggests that mixed communities can lead to better social outcomes, but this depends on careful planning and management.

A well-calibrated policy could indeed promote better social mixing within new developments, fostering more diverse and inclusive communities, and the ability to tailor housing mix to local needs could potentially enhance community cohesion.

However, without careful implementation, these changes could lead to less integrated communities. The potential reduction in social housing could result in increased socio-economic segregation in some areas.

(v) Market Dynamics and Affordability

It is hoped the changes proposed by the Consultation could allow for more rapid adaptation to market conditions, potentially leading to increased overall housing supply, which could help address affordability issues.

However, any significant change in the supply of social and affordable homes could influence wider housing market trends, potentially affecting house prices and rental markets in ways that might be difficult to predict. In the absence of strong safeguards, the focus could shift too far towards market-rate housing at the expense of genuinely affordable options.

(vi) Long-term Planning and Strategy

The changes envisaged by the Consultation could provide an opportunity for a more dynamic, responsive approach to housing provision that can adapt to changing demographics and economic conditions over time.

However, the removal of national minimum requirements could make it more challenging to ensure consistent provision of affordable and social housing across the country. Local authorities might struggle to maintain adequate levels of social housing without the backing of national policy, potentially leading to shortfalls in provision for the most vulnerable members of society.

(vii) Social Mobility

It is clear that reduced access to affordable and social housing has a direct impact on social mobility, and research from the Social Mobility Commission indicates that access to stable, affordable housing is crucial for improving long-term prosperity.

(viii) Construction Industry

Changes in affordable housing requirements could affect the business models of construction firms specialising in this sector, potentially leading to job losses or industry restructuring.


C: International Comparisons

Looking at international examples can provide valuable context and demonstrate alternative approaches to ensuring affordable housing provision, which could inform UK policy discussions. For example:

Global Social Housing Comparison
Location Social Housing Overview
The Netherlands The Dutch social housing sector accounts for about 30% of the total housing stock, one of the largest shares in Europe. Housing associations, which are independent non-profit organisations, play a crucial role in providing affordable housing.
Singapore The city-state’s Housing and Development Board provides public housing for about 80% of the population. While most units are owned, not rented, the system ensures widespread access to affordable housing.
Vienna, Austria About 60% of Vienna’s residents live in public housing or subsidised “social housing”. The city’s unique model of social housing has helped maintain affordability and social mixing.

D: Potential Solutions and Alternatives for the UK

Approaches to Affordable Housing
Approach Description
Community Land Trusts Non-profit organisations that acquire and manage land to provide affordable housing. The National Community Land Trust Network reports over 300 CLTs in England and Wales, providing an alternative model for affordable housing provision.
Modern Methods of Construction (MMC) Embracing MMC could reduce construction costs and timelines, potentially making affordable housing provision more viable for developers. A report by Cast Consultancy suggests that MMC could deliver up to 40% of new homes by 2030.
Build to Rent with Affordable Component Encouraging Build to Rent developments with a mandated proportion of affordable units could increase the overall supply of affordable homes. The British Property Federation reports significant growth in the Build to Rent sector, with over 170,000 units either completed or planned.
Revolving Infrastructure Funds These funds could help finance upfront infrastructure costs, making it easier for developers to include affordable housing in their plans. The Housing & Finance Institute has proposed this as a potential solution to boost housing supply.
Expanded Use of Public Land Utilising public land for affordable housing development could reduce land costs, a significant barrier to affordable housing provision. The Public Accounts Committee has identified this as a potential area for improvement in affordable housing delivery.

E: Conclusion

The proposed changes to affordable and social housing policies in the NPPF consultation 2024 represent a significant potential shift in the UK’s approach to housing provision.

While there are clear advantages to introducing more flexibility and potentially increasing the overall housing supply, there are also substantial risks and challenges to consider, especially concerning the provision of social housing for the most vulnerable members of society.

The success of any policy changes will depend on careful calibration of local needs, robust mechanisms to prevent exploitation, and a clear focus on delivering a balanced mix of housing types, including genuinely affordable and social homes.

Moreover, changes to affordable and social housing policies cannot be viewed in isolation; they must be considered as part of a holistic approach to addressing the UK’s housing crisis, including measures to increase overall supply, improve housing quality, and ensure the long-term sustainability of communities.

As we await the outcome of the Consultation, it will be crucial for all stakeholders – including local authorities, developers, housing associations, and community groups – to engage fully with one another.

The final policy decisions will have far-reaching consequences for the shape of UK communities and the ability of people across the income spectrum to access suitable, affordable housing for years to come.

Ultimately, while the NPPF Consultation presents opportunities for positive change, it also underscores the complexity of the affordable and social housing challenge. Any alterations to existing policies must be carefully considered, evidence-based, and focused on delivering tangible benefits to those in need of affordable homes across the UK, while ensuring that the provision of social housing is not neglected in the pursuit of overall housing targets. The exploration of alternative models and international best practices could indeed provide valuable insights in shaping a robust and inclusive housing policy for the future.


To read more of Joanna Lee-Mills articles, you can view her profile here. Once you’re there, click on “my posts”

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Joanna heads up our social housing development team. Her expertise encompasses advising on social housing development transactions, from site assemblies to larger scale phased/portfolio sales and purchases.

Having acted for registered providers since 2001, Joanna’s expertise encompasses all aspects of affordable housing acquisitions, sales and development and is often the primary interface on multi-disciplinary projects involving cross-departmental working.

Joanna has previously worked at Birmingham city law practices Eversheds and Anthony Collins, and has a wealth of experience in larger scale social housing projects, including stock rationalisation transactions, stock swaps and transfers.

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