NPPG updated to reintroduce small site exemption and vacant building credit


On 19 May 2016, the Department for Communities and Local Government made several changes to National Planning Practice Guidance ("NPPG") including the reintroduction of the small site exemption for affordable housing contributions and "vacant building credit." Another notable update was the clarification of the deadline concerning appeals for applications to renegotiate unviable affordable housing requirements.

We discuss these two key changes below.

Small Sites Exemption

On 28 November 2014, Brandon Lewis, Minister for Housing and Planning, announced that "due to the disproportionate burden of developer contributions on small-scale developers" sites of 10-units or fewer or which had a maximum combined gross floor space of 1,000 square metres were to be exempted from affordable housing and tariff style contributions.  Lewis also announced the introduction of 'vacant building credit,' a financial credit, equivalent to the existing gross floor space of any vacant buildings brought back into any lawful use or demolished for re-development, was to be deducted from the calculation of any affordable housing contributions.

Paragraphs to the NPPG were added to include the small site exemption and vacant building credit, reflecting the Ministerial Statement.

These paragraphs were deleted after Reading Borough Council and West Berkshire District Council succeeded in challenging the policy in the High Court. However, following the Government's successful appeal against the High Court decision, it was only a matter of time before the policy was reintroduced into the NPPG.

The renewed guidance, published on 19 May 2016, now notes that "the order of the Court of Appeal dated 13 May 2016" provides "legal effect to the policy set out in the Written Ministerial Statement of 28 November 2014 and should be taken into account."

As before, the NPPG provides that local planning authorities may choose to apply a lower threshold of 5-units or less in "designated rural areas" The policy also does not apply to "rural exception sites" (these being small sites used for affordable housing in perpetuity, where sites would not normally be permitted for housing).


Local authority affordable housing targets, especially for those that place more reliance on contributions from smaller sites, will inevitably suffer under the renewed guidance. This may lead to authorities favouring larger-scale development in rural areas so as to meet their affordable housing targets or, alternatively, developers preferring smaller sites so as to avoid having to meet the requirements.

It is worth noting, however, that authorities can still seek obligations for site specific infrastructure such as improving road access and the provision of adequate street lighting where this is appropriate, to make a site acceptable in planning terms. 

Sections 106BA to BC

Another notable change is the clarification of the deadlines relating to the temporary appeal procedure for challenging unviable affordable housing requirements.

Sections 106BA to 106BC of the Town and County Planning Act 1990 used to provide an application and appeal procedure for the review of affordable housing obligations based on economic viability grounds without taking into account other aspects of the planning consent. These provisions were repealed on 30 April 2016, after ministers decided not to extend the temporary procedure.

In light of this, the NPPG has been updated to state that: "Guidance concerning applications made under Section 106BA continues to apply to applications received before the end of April 2016." The revised guidance also explains that appeals to the Secretary of State under Section 106BC on affordable housing viability will still be considered if an application to review obligations was made before 30 April 2016 and all procedural requirements have been met.

Interestingly, however, there are not actually any transitional regulations in place permitting appeals to be decided after the 30 April 2016 deadline. Without express provisions in place, appeal decisions made after this deadline could potentially be at risk of challenge by way of judicial review. Such threats could well have been avoided by enacting express transitional provisions. 

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