Affordable housing rules dropped to boost builders

HOUSEBUILDERS and business organisations yesterday welcomed the government’s decision to temporarily relax planning laws as Downing Street announced it would scrap the requirement for private developers to build affordable housing in an attempt to kick-start a construction boom.

Under existing rules builders are required to designate a set percentage of every development either for housing associations or available at a reduced price. The coalition says this requirement can be too onerous and will allow developers an opt-out if they can prove that it economically unviable to develop a site.

The government claims that this will allow the development of up to 75,000 new homes. In compensation there will be £300m of capital funding to build 15,000 affordable properties, while efforts will also be made to encourage development for the private rented sector.

“Instead of having developers sitting for five years on useless land where nothing has happened, no young people are being employed on construction sites, no affordable homes are being built, no new houses are being built for first-time buyers, we are saying ‘Let’s undo that knot at an earlier stage’,” explained deputy prime minister Nick Clegg.

The news follows an earlier announcement that homeowners will be allowed to add medium-sized extensions to their house without planning permission.

“We have long said that unfreezing the housing market will be a major game-changer in the drive for economic growth,” said CBI director-general John Cridland. “[These proposals] will provide a much-needed tonic for the construction sector, getting diggers on site and people into work. It will make a difference to households across the country.”

Chris Tiner of builders Crest Nicholson said the initiatives would encourage his firm “to increase output, creating the jobs and skills that are vital for the future of the economy”.

But Sir Merrick Cockell, Conservative head of the Local Government Association, claimed that councils were not blocking house building: “Local authorities are overwhelmingly saying ‘yes’ to new development. There are enough approvals in the system for 400,000 new homes and more than three years of building.”

THE PLANNING RULES

■ Developers who can prove that affordable housing requirements make a project commercially unviable will be able to have them removed.

■ A new Infrastructure Bill will guarantee up to £40bn of investment in major infrastructure projects and £10bn for new homes, enabling Housing Associations and the private rented sector to expand.

■ The government will provide £300m of capital investment to build 15,000 new affordable homes and bring 5,000 houses back into use.

■ An additional 5,000 homes will be built for rent at market rates.

■ 16,500 first-time buyers will be offered financial assistance with a £280m extension of the government’s ‘FirstBuy’ scheme. This provides purchasers with a loan of up to 20 per cent of the value of a new home.

■ Thousands of big commercial and residential applications will be directed through a fast track planning process.

■ Councils that show a record of poor or slow decision making on planning issues will risk having their powers transferred to a centralised Planning Inspectorate.

■ Homeowners will be allowed to build extensions that stretch eight metres from the back of detached homes and six metres from other buildings without needing to seek planning permission. Loft extensions may also be included.

■ Businesses will be able to expand shop premises by 100 square metres and industrial units by 200 square metres without permission.

■ All the relaxations in planning law will be for a temporary period, currently expected to be three years.