An Affordable Housing Statement and a Financial Viability Appraisal are both planning documents used in development proposals, but they serve different roles.
An Affordable Housing Statement is about policy compliance. It explains how a development meets the local authority's affordable housing requirements. This typically includes the proportion of affordable homes, the mix of tenures (such as social rent or shared ownership), the size and type of units. In simple terms, it answers: 'What affordable housing are we providing, and how does it comply with policy?'. It is usually required for most planing applications involving residential development.
A Financial Viability Appraisal on the other hand, is about financial justification. It assesses whether a development can realistically afford to meet those policy requirements. It can look at costs (like construction, finance and fees), expected revenues (sales values or rental income) and developer profit. If a developer claims they cannot meet the full affordable housing requirement, the FVA provides the evidence to support the claim. Essentially, it answers: 'Why can't we deliver the full policy requirements?'.
The key difference is:
- The AHS sets out what is being delivered in terms of affordable housing.
- The FVA explains why delivery may fall short of policy expectations.
In practice, if a scheme fully complies with affordable housing policy, only an AHS may be needed. If it does not, an FVA is typically submitted to justify the shortfall.
