Government backtracks on raising affordable housing threshold

The Ministry of Housing, Communities and Local Government has stated that the proposal to raise the site threshold for affordable homes provision has been dropped.

(Good news but slipped out during Easter – Owl)

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According to MHCLG, the measure, which would have temporarily lifted the small sites threshold for affordable housing provision to 40 or 50 homes, would not be necessary at this stage due to the industry’s robustness in the face of the pandemic and “the other measures we have available to support SMEs”.

The measure was proposed to support SMEs during the economic upheavals of the coronavirus crisis.

MHCLG said it would continue to closely monitor the market and speak to SME housebuilders about their challenges and the support that could be given, adding that there are no plans to raise the small sites threshold at this stage.

In current policy, a site of ten homes or more is considered a “major development” and will be subject to affordable housing provision.

In December, the government decided to scrap another proposal from the consultation – changes to the standard method for assessing local housing need. MHCLG planned to introduce an algorithm that would have increased housebuilding in the south of England. But the proposals caused consternation among Conservative MPs.

On the proposed change to the affordable homes threshold, MHCLG said: “The government consulted on raising the small sites threshold in order to assess if it was necessary in the economic circumstances to provide additional support to SME builders.

“We have carefully considered the consultation feedback and the situation in the housing market. On balance, we do not consider this measure to be necessary at this stage, particularly in light of the broader way in which the sector has responded to the challenges of the pandemic and the other measures we have available to support SMEs.

“We therefore do not think any change to existing policy is currently needed.”