The return of "Vacant Building Credit"

Authors: Matthew White, Partner and Head of Planning, London and Lucy Morton, Professional Support Lawyer, Planning, London

The world of planning has been busy: the new Mayor of London is making promises including measures to improve air quality and to introduce a long term strategic target of 50% affordable housing, the Housing and Planning Act has received Royal Assent (although the final version has not yet been published at the time of writing), a new Neighbourhood Planning and Infrastructure Bill has been announced and a Court of Appeal decision has restored the 'vacant building credit' and the exemption for small sites from affordable housing requirements.

It's the last of these that we will look at today.  

The restored Government policies state that:

-           Vacant building credit can be claimed for empty buildings brought back into lawful use or demolished for redevelopment: the developer should be offered a financial credit equivalent to the existing gross floorspace of those vacant buildings when the local planning authority calculates any affordable housing contribution which will be sought; and

-           Exemptions from affordable housing requirements can be claimed for small sites (10 units or less and which have a maximum combined gross floorspace of 1,000 sqm).

The Government had originally introduced these policies by a Written Ministerial Statement on 28 November 2014.  However, the Statement was challenged and in July 2015 the High Court quashed it, criticising the way the policies were introduced and questioning the lawfulness of the process.   Therefore neither of the policies applied after 31 July 2015 and the National Planning Practice Guidance (NPPG) was amended accordingly.

Then the Government challenged the quashing and, on 11 May 2016, the Court of Appeal upheld their challenge and overturned the High Court decision, thereby restoring the policies. The Court of Appeal decision hardly mentioned the vacant building credit policy and neither did the Government's press release on the same day, instead both concentrate on the exemption from affordable housing requirements for small sites.  However the NPPG was updated on 19 May 2016 to reflect the restoration of both policies and we assume therefore that both now apply again.

It was never clear exactly how the vacant building credit was intended to operate and it seems that in practice it will be for the relevant local authority to determine how the policy will apply in their area.

The updated guidance on vacant building credit can be read here and the updated guidance on exemptions from affordable housing requirements for small sites can be read here. 

The Court of Appeal judgement we refer to is Secretary of State for Communities and Local Government v West Berkshire District Council and Another [2016] EWCA Civ 441 (11 May 2016).

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