Q. What is an Affordable Housing Viability Assessment?
A. A Viability Assessment is a professional appraisal of the costs and revenues of a development. This is reviewed by the Council and used to negotiate the amount of affordable housing and/or other planning obligations which the development can afford to contribute. The owner/developer is entitled to an appropriate level of profit, usually 20% of Gross Development Value.
Q. Is a Viability Assessment the same as an Affordable Housing Statement?
A. No. An Affordable Housing Statement is a statement to identify what the affordable housing proposals are for a scheme. We can produce an affordable housing statement for a proposed development (without the need for a viability assessment) if policy is to be met or if the viable level of affordable housing has already been determined.
Q. At what point should I engage the services of a viability consultant?
A. We can give the best advice and help to maximise profits if we are engaged at the early stages of a project. We also provide advice throughout the planning process and after consent has been granted on your scheme. Our expert viability advice has always saved our clients far more money than it has cost them in fees. Call us to discuss how we can help.
Q. The Local Planning Authority (LPA) insists that the proposed development provides 50% of all units for affordable housing — is this negotiable?
A. The amount of affordable housing to be provided may be less than required by policy if it can be justified by the applicant by way of a viability assessment. The LPA will examine the viability assessment by having it independently reviewed.
Q. The Council insists that the affordable housing land and/or units are transferred freehold to Registered Providers (RP) on their preferred RP partners’ list — is this correct?
A. The LPA cannot insist that the freehold is transferred — leasehold is all that is required. It is also possible to contract with any Registered Provider (RP)/Housing Association of your choosing. It may be possible for the developer or a non RP/Housing Association to own/manage the affordable housing themselves.
Q. The LPA demand that the affordable housing tenures must be split 70% rent and 30% shared ownership (Intermediate Housing). Is this correct?
A. The LPA cannot demand these percentages — they must be evidence based, reasonable and appropriate. This should be negotiated and confirmed with the potential beneficiary RP.
Q. The draft S106 Agreement requires service charges to be capped at a rate of £1,000 per annum in order to make the affordable housing conform to the affordability criteria — is that legal?
A. The Council cannot legally demand this so the clause should be removed. We can negotiate the S106 Agreement on your behalf. Please give us a call.