Proposal to lift the small sites exemption threshold - Kuits Solicitors Manchester
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Affordable housing: government may lift exemption threshold for small sites

Affordable housing: government may lift exemption threshold for small sites

1st September 2020 - Published by Planning team

The government is asking for representations to be made on its proposal to lift the small sites exemption threshold to up to 40 or 50 units whilst the economy recovers. If implemented, this would mean there would be no affordable housing requirements, (either in terms of dwellings or contributions) for these sites for what the Government describes as ‘the medium term’. Here, the Kuits planning team explores the relevance for developers.  

Assisting SME developers

Whilst undertaking its holistic review of the planning system, the government has recognised that it needs to take more immediate action to assist small and medium-sized developers stay on their feet during any economic downturn, as sweeping changes to legislation and policy will, by their very nature, take their time to put in place.  

Accompanying the large swathe of radical plans put forward for consultation by the Ministry of Housing, Communities and Local Government in Planning for the Future were four shorter term proposals – one of which was to raise the threshold for affordable housing provisions on smaller sites. 

Small Sites Affordable Housing Exemption

SME developers make a valuable contribution to the overall housing supply, as they build out more quickly than developers on larger sites and increase the diversity of house type and design within local areas.  

The government showed its support for SMEs developing small sites in 2014 when a Written Ministerial Statement, “Support for small scale developers, custom and self-builders”, introduced a national minimum site size threshold for seeking affordable housing. The statement advised that “due to the disproportionate burden of developer contributions on small scale developers, for sites of ten units or less……affordable housing and tariff style contributions should not be sought.”  

The latest iteration of the National Planning Policy Framework states that affordable housing should not be sought for residential developments that are not major developments (which, for housing, is development where ten or more homes will be provided, or the site has an area of 0.5 hectares or more) other than in designated rural areas. Whether this policy must be adopted by local planning authorities has been considered and decided in both a positive and negative manner by Planning Inspectors in various planning appeal decisions on this point. 

The consultation paper follows on from the government guidance issued early on in the COVID-19 pandemic, which asked local planning authorities to be flexible when considering the timing of developer contributions  sign-posting the government’s recognition that SME developers were being hit hard by the economic slowdown caused by the pandemic. The paper considers once again the aforementioned ‘burden’ of making planning contributions. It is an acknowledgment that in an economic downturn, the level of planning obligations could mean the difference between a viable and non-viable development, particularly on small sites.  

Perhaps surprisingly, in light of the government’s very publicised push to improve housing numbers and to make housing more affordable for all, the consultation advances the idea that SME developers would benefit if – temporarily – they did not need to provide affordable housing on sites over the current threshold of 0.5 hectares.  

The government is asking for representations to be made on the proposal to lift the small sites threshold to up to 40 or 50 units whilst the economy recovers. As with many economic policies, the government is attempting to strike a balance between delivering housing and economic recovery, despite estimating that this could reduce delivery of affordable dwellings by around 20 per cent. 

Although the government believes that increasing this threshold will go some way to supporting SME developers during the pandemic (and the recovery from it), they also recognise that, in addition to planning contributions, there may be many reasons why SME builders are unable to access and progress developable sites at this time. The consultation states that the government is keen to ‘stimulate economic recovery with a particular focus on SMEs….’, such that it asks SME builders to put forward any other ways they consider the government can help them in the delivery of new homes.  

Get in touch with a planning lawyer in Manchester

Should anyone wish to consider making representations on the small sites exemption or any other ways the government could support them, or should you wish to know more, please contact a member of the Kuits’ planning team to discuss the most effective way of doing this.

Victoria Leam: 0161 503 2998 or

Bob Sadler: 0161 838 7991 or

The consultation closes on Thursday 1 October 2020. 

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