Southwark Affordable Housing Policy

Southwark’s new local plan was adopted in February 2022, it states that it will “set out how the areas will develop and the policies will guide developments”.

Regarding their affordable housing policy, they turn to their Affordable Housing SPD (2008), whereby they aim to deliver 50% as affordable, with a minimum provision of 35%. On-site provisions are expected of developments between 10-14 and 15+ dwellings; however, dependent on the location of the site, the requirements differ.

For the developments within the Urban and Suburban Density Zones and within the Elephant and Castle Opportunity Area, 15+units must provide at least 35% affordable housing. Compared to developments within the Central Activities Zone excluding the Elephant and Castle Opportunity Area, 15+ units must provide at least 40% affordable housing. In contrast, schemes with 10-14 units are required to provide a specific number of units compared to a %, as outlined below:

 

Off-site provisions may be justified in certain cases where an on-site delivery is not possible -therefore, a payment in lieu may be accepted. The payment requires a minimum of £100,000 per habitable room in CIL Zones 1 and 2, this is based on 35% being required as affordable. See below for an example:

 

The money from these off-site provisions are put together into an affordable housing fund and appropriately distributed across other schemes within the borough.

Habitable rooms are defined as “a room with a window within a dwelling that is intended to be used for sleeping, living, cooking or dining,regardless of what it is actually used for.”.

Previous Work in Southwark:

Proposed development = Extend and refurbish the existing property and to erect a new detached house to the rear of the existing property.

Policy Implications/Requirements = ‘Development that creates 9 homes or fewer (inclusive) must provide the maximum amount of social rented and intermediate homes or a financial contribution towards the delivery of new council social rented and intermediate homes with a minimum of 35%subject to viability’.

Expectation on Affordable Housing = 35% of additional dwellings, provided as off-site in lieu payment. £100,000 per habitable room based on 35%. 4 habitable rooms = 35% of £400,000 (£140,000).

Result = The residual site value was determined to be less than the Benchmark Land Value and therefore resulted in a negative figure, allowing a profit of 6.54%,which is lower than the targeted 20%. Therefore, the contribution towards affordable housing was dismissed.

Please get in touch if you have any problems with the Southwark Affordable Housing policy impacting the viability of your development.

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