Affordable housing and the new NPPF

The government’s mission is to deliver 1.5 million new homes by 2029. The recently updated National Planning Policy Framework (“NPPF”) has been designed to help achieve that objective.

The need for affordable housing is an ever-increasing problem in the England. According to statistics released by Shelter (2025) there are 1.3 million households on social housing waiting lists across the England. From “Social Rent” and “Affordable Rent” units that are managed by affordable housing providers to First Homes, (new build properties sold at a discount by developers), affordable homes play an important part in the delivery of new housing in England.  Concerns have however been raised over the ongoing delay in delivering affordable housing together with the true affordability of some affordable housing schemes.  In this article, we take a look at some of the ways the new NPPF will attempt to tackle these so far insufficiently addressed issues.

The new NPPF seeks to address affordability by requiring a greater emphasis on the provision of “Social Rent” housing.  A definition of “Social Rent”, is now included in the NPPF, requiring rent to “remain at an affordable price for future eligible households…”.  “Affordable Rent” homes on the other hand, are homes rented out by affordable housing providers at up to 80% of the private rented value of the property in its local area. In some areas of England, the reality is that the rent is simply not affordable, even at the discounted rate. Ultimately, it will be for the local authorities to decide on the level of “Social Rent” homes that are required in their local areas. Where a need for affordable housing is identified, “planning policies should specify the type of affordable housing required” which should include “the minimum proportion of Social Rent homes required”.  This is undoubtedly a positive step in ensuring that affordable homes are given necessary priority, but it remains to be seen whether enough “Social Rent” homes will actually be built to meet demand.

The requirement for developers in the NPPF to deliver a minimum of 25% of affordable housing as First Homes within a site’s affordable housing mix now no longer applies.  First Homes are housing offered to first-time buyers at a discount of at least 30% of the private open market value.  The NPPF now leaves it open for local authorities to decide on the delivery of First Homes where they consider that the housing meets a genuine local need – providing flexibility for local authorities to require a mixture of affordable housing tenures within a new development.

Affordable housing in Green Belt development has also now been addressed by the new NPPF with the introduction of the “Golden Rules”.  The NPPF states that the boundaries of the Green Belt” should only be altered where exceptional circumstances are fully evidenced and justified”.  Local authorities with Green Belt areas will have to carefully review their Green Belt boundaries and where a decision is taken to release Green Belt land for development, plans should give priority to previously developed land, then consider grey belt which is not previously developed, and then other Green Belt locations”.  As part of the “Golden Rules” a specific affordable housing requirement should be set by local authorities for major housing development within the Green Belt or on land set to be released from the Green Belt.  This requirement will be set at higher level than land that is not within or proposed to be released from the Green Belt and it should require a provision of at least 50% affordable housing.  Whilst local plans are being updated to reflect the 50% requirement, interim provisions set out in NPPF, allow for affordable housing to be delivered at a rate of 15% above the existing affordable housing requirement – extending up to a 50% cap.  Where a local authority does not already have a pre-existing requirement for affordable housing, a 50% affordable housing contribution should now generally apply by default. This is subject to the caveat that such requirements would not apply if it would make the development site unviable where the “use of site-specific viability assessment for land within or released from the Green Belt should be subject to the approach set out in national planning practice guidance on viability”.  The NPPF clarifies: “The 50% cap does not apply to rural exception sites or community-led development exception sites, or if the local planning authority has a relevant existing policy which would apply to the development which is above 50%”.

Review of Green Belt boundaries could result in the release of land for development which in turn will create opportunities for affordable housing.  But, given that only a small part of England is covered by Green Belt, it is unclear the extent to which this new requirement will really assist the Government in reaching their 1.5 million new homes target.

Whilst the changes appear a positive step to providing future additional affordable housing in the England, little appears to have been done to tackle the immediate demand for affordable housing.

Section 106 agreements are used by local planning authorities to deliver on-site affordable housing in line with development milestones as a development progresses. As an alternative, registered affordable housing providers can apply for grant funding through the Government’s Affordable Homes Programme for non-section 106 agreement affordable housing units (where the funding can’t be used).  According to a recent survey carried out by the Home Builders Federation (“HBF”), at least 17,432 section 106 agreement affordable housing units with detailed planning permission are not subject to a contract with a registered affordable housing provider and there are currently 139 housing development sites that are delayed due to being unable to find a registered affordable housing provider for the section 106 agreement affordable housing units. The HBF survey report proposes solutions to combat this issue including: (1) working with local planning authorities to agree “cascade agreements” – to allow developers to continue to build out homes in the event that a registered affordable housing provider cannot be found for their development by either agreeing a change in the tenures of the affordable homes or making a payment in lieu of the affordable homes as a last resort; (2) encouraging developers to engage with registered affordable housing providers much earlier on in their development schemes; (3) allowing registered affordable housing providers to use grant funding for section 106 agreement affordable housing units for a limited period; and (4) looking at the financial capacity of the affordable housing sector and how that can be improved.

The changes to the NPPF are the first steps in a much longer journey in trying to provide enough affordable homes to meet future need. It seems clear however that the Government, local planning authorities and industry leaders will need to work quickly together to find a workable solution to elevate the immediate current need for affordable housing in the UK.

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