Small sites exemption reintroduced article banner image

Following the recent Court of Appeal decision, the National Planning Policy Guidance (NPPG) has reinstated small site thresholds for affordable housing contributions and other tariff based contribution exemptions.

As set out in the Starter Homes Written Ministerial Statement of 2 March 2015, the NPPG now provides that starter homes exception sites should not be required to make affordable housing or tariff-style section 106 contributions.

The Guidance sets out specific circumstances where contributions for affordable housing and tariff style planning obligations (section 106 planning obligations) should not be sought from small scale and self-build development.

The circumstances are that:

  • contributions should not be sought from developments of 10 units or less (no more than 1000sqm);
  • in designated rural areas, local planning authorities may choose to apply a lower threshold of 5 units or less for which no contributions should be sought. In a rural area where the lower 5 unit or less threshold is applied, affordable housing and tariff style contributions should be sought from developments of between 6 and 10 units in the form of cash payments which are commuted until after completion of units within the development. This applies to rural areas described under section 157(1) of the Housing Act 1985, which includes National Parks and Areas of Outstanding Natural Beauty; and
  • affordable housing and tariff-style contributions should not be sought from any development consisting only of the construction of a residential annex or extension to an existing home.

This will be welcome news for developers of small sites, and will give a boost to many stalled developments.

Sarah-Jane Williams, Associate in the Planning team at Stephens Scown says “Since the 11 May 2016 Court of Appeal decision small developers have been eagerly anticipating the reintroduction of the small site exemptions into National Planning Policy Guidance (NPPG). Now the policy has been reinstated it is likely that previously stalled small developments will come forward. As an incentive to boost brownfield development yesterday’s NPPG update also restored the vacant building credit. Whilst the changes are welcomed by developers it is worth noting that the original challenge to the government policy was brought by two Local Planning Authorities who argued that it would lead to a reduction in the provision and delivery of affordable housing.”


Stephens Scown’s planning team are holding a spring/summer planning update in June – to find out more and to register, please contact us.