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Court of Appeal Ruling Supports Housebuilding on Small Sites

Developers may now be able to build more properties thanks to a Court of Appeal decision allowing more homes to be built on smaller sites.

Introduced in November 2014, the affordable housing contributions policy for smaller sites was intended to increase the number of residential properties constructed on brownfield sites. It posits that developments with ten units or less, with a maximum composite floor space of 1,000 square metres should not be required to make affordable homes contributions.

The court decision will resurrect a government policy that enables affordable housing contributions to be the responsibility of bigger developers working on larger sites. Smaller companies developing sites with no more than 10 homes will be able to commence construction without charges that could stop work.

West Berkshire District Council and Reading Borough Council initiated the legal action brought before the Court of Appeal. Ministers dismissed challenges to the policy as a complete waste of taxpayer money.

Housing and Planning Minister Brandon Lewis said that the government is committed to building more affordable homes, and the first step is to prevent unnecessary bureaucracy and red tape that prevents work from starting in the first place.

Mr. Lewis said that the Court of Appeal judgment ensures that builders working on smaller sites -including self-builders- will not be hit with costs that prevent them from doing any work at all. He also expressed hope that councils will direct their time and money toward delivering the services that local people rely on and supporting much-needed new housebuilding in their respective areas.

Brian Berry, Federation of Master Builders chief executive, also applauded the decision. He said that his organisation welcomes the Appeal Court’s confirmation of the government right to waive affordable housing contributions for locations with 10 or fewer units.

Specialists in Construction Insurance

Mr Berry stated that if the chronic shortage of new homes in the UK is going to be properly tackled, SME housebuilders are going to have to experience rejuvenated output growth.

He said that the recent verdict will “go a long way” toward giving these firms the support that they need. Economics of smaller development schemes will become much easier and the use of smaller sites for new homes should increase.

Nearly half of all SME housebuilders have their eyes on sites that they are interested in developing for homes, but believe that work will be unviable due to a combination of Community Infrastructure Levy and Section 106 charges. These required contributions are problematic for many smaller developers, terminating scores of otherwise viable projects and posing a serious obstacle to expansion.

Mr Berry said that reinstatement of the threshold will free the smaller developments from being burdened with unaffordable prerequisites, enabling them to build sustainable small-scale developments that will benefit everyone, including local councils.

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