Preserving affordable housing on Preston Fields

Representation against the developer's proposal to reduce the affordable housing numbers on Preston Fields prepared by Stephen Atkins, Land Director, FCLT

Preston Fields Site A - 24/50129/REM - Submission of S73 to vary Condition 1 of the reserved matters approval (ref 23/501167/REM) pursuant to outline permission (ref 16/508602/OUT) for Site A, Preston Fields Faversham.

The Faversham Community Land Trust (FCLT) is an organisation primarily concerned with the acquisition and development of land and buildings within Faversham for the good of the community. Our principal objective is to secure property assets to provide a perpetual supply of truly affordable housing for local people.

A Housing Needs Survey (HNS), specifically addressing the Faversham Market, was commissioned by FCLT and Faversham Town Council to identify the focus of activity for the trust to meet their objectives. The Arc 4 HNS report was published August 2020. This is appended to the approved (subject to referendum) Faversham Neighbourhood Plan and identifies the housing need for both market and affordable housing in Faversham. 

HNS Para5.7 - Overall, the HNS provides a significant body of evidence for the Faversham Town Council and the Community Land Trust to resist housebuilding that is not needed by local people and prioritise that which is needed.

Context Of the Proposal

The applicants state that “Following the approval of the reserved matters (ref 23/501167/REM) several matters have been identified that require a further minor material amendment (via s73) to the consent including affordable housing tenure change.”

We don’t believe that the proposed loss of 49 affordable rent units to shared ownership can be seen, in the context of Faversham Housing Needs, as a minor matter.

The application has been submitted to trigger a request for amendments to the S106 Agreement dated 9th February 2023.  This embraces two outline planning consents with separate commitments for the allocation and tenure of affordable housing as detailed below”.

16/508602/OUT  231 units - S106 Schedule 4 

Affordable Dwellingsmeans the 35% (thirty five percent) of the Dwellings (rounded up to the nearest whole Dwelling) together to be provided by the Owner on the Original Development Land of which (a) 90% (ninety percent) shall be Affordable Rented Units and (b) 10% (ten percent) shall be Shared Ownership Units which are to be transferred to a Registered Provider for housing persons in Housing Need.

21/500706/OUT   70 units - S106 Schedule 5 

Affordable Dwellings means 35% (thirty five percent) of the total number of Dwellings (rounded up to the nearest whole Dwelling) to be provided by the Owner on the Additional Development Land of which (a) 75% (seventy five percent) rounded to the nearest 
whole Dwelling shall be Social Rented Units which 
are to be transferred to a Registered Provider for 
housing persons in Housing Need in accordance 
with the provisions of this Schedule and (b) 25% (twenty five percent) (rounded to the nearest 
whole Dwelling) shall be First Homes.

The applicant’s request is seeking to renegotiate the S106 agreement but are silent as to whether this negotiation will also seek to address amendments to the affordable provisions obligated within the 2021 outline consent.  No reserved matters application has been submitted for this scheme.  However, the current application opens up the Agreement. We are concerned that the applicants will seize this opportunity, outside the theatre of public scrutiny, to abandon their obligation to provide the much-needed Social Rented Housing and First Homes scoped in Schedule 5. We request that the applicants are asked to provide an undertaking that they will not be seeking revisions to Schedule 5 of the S106 Agreement without the prior submission of a reserved matters application including the Affordable Housing Scheme.

 The current application (24/50129/REM)is a S73 application which seeks to vary Condition 1 of the reserved matters approval (ref 23/501167/REM) by substitution of the approved drawing with   an amended Affordable Housing Scheme.

The proposal seeks to switch the tenure of 49 affordable rent units to shared ownership. This represents a 60% reduction in the contracted S106 policy tenure allocation for affordable rent which reduce from 90% to 30% of the  affordable mix.  The 70% allocation of Shared Ownership (a discredited form of tenure) is disproportionate.  Consequently, the proposal does not address Faversham’s Housing Need and the application should be refused on these grounds, as evidenced below.

Planning Context - The Faversham Neighbourhood Plan

The Swale Local Plan 2017 is out of date and the emerging new local plan is stalled pending clarification on the required housing numbers.

The independent examination of the Neighbourhood Plan has now been concluded. The Borough Council received the Examiner’s Report on 25 April 2024. This concludes the Faversham Neighbourhood Plan meets the basic conditions test and the legal conditions subject to the amendments set out in that same report and that the NP should proceed to referendum.  On 22 May 2024 the Council agreed that the Faversham Neighbourhood Plan can proceed to the referendum stage after a 6-week consultation on the Decision Statement. The consultation is likely to start in late summer 2024. The Faversham Neighbourhood Plan includes site allocations for housing.  Paragraph 48 of the NPPF states that local planning authorities may give weight to relevant policies in emerging plans according to:

1          the stage of preparation of the emerging plan (the more advanced its preparation,

            the greater the weight that may be given)

2          the extent to which there are unresolved objections to relevant policies (the less

            significant the unresolved objections, the greater the weight that may be given)

3          the degree of consistency of the relevant policies in the emerging plan to this

            Framework (the closer the policies in the emerging plan to the policies in the

            Framework, the greater the weight that may be given).

Taking account of the stage of preparation that the emerging Faversham Neighbourhood Plan has reached, the emerging plan is afforded considerable weight for the purposes of determining this application.

Policy FAV3: Residential Mix and Standards

1          Residential schemes should include a mix of accommodation to meet local housing need

            including:

  • accommodation suitable for families (3 bedrooms) as a predominant part of the mix.
  • smaller accommodation (2 bedrooms or fewer) suitable for first-time buyers or renters or those seeking to downsize.
  • accommodation suitable for older people and those with limited mobility.

2. Affordable housing provision should include:

    66% affordable rent.

            34% affordable ownership.

  1. Support will be given to affordable housing provision that remains available in perpetuity,

            including First Homes and community-led housing.

  • Affordable housing should:
  • be provided as an integral part of housing schemes and be tenure blind.
  • if there are planning reasons for affordable housing provision to be provided separately from the scheme, it should be provided nearby and within Faversham Parish, to meet local need.

The Faversham Housing Needs Survey.

There is a high level of need for affordable rented property from newly forming households in the town as evidenced in the survey.

Affordable rented need arising from existing households

Data from the moving households were filtered by a number of factors to arrive at the quantity of households requiring social rented housing in Faversham i.e. households were not counted unless they met all of the following criteria:

  • indicated an intention to move home in the next 5 years.
  • in housing need (aspirational moves were not included);
  • could not afford entry level market renting or home ownership.
  • were seeking their home in Faversham; and
  • were seeking to rent from a housing association.

187 households met all the above criteria. Their housing requirements are summarised in table 4.7. An age breakdown is also provided based on the age of the household representative person (HRP).

4.15
Table 4.7 shows that most need arises in younger households, and these mostly seek flats and houses. Older household mostly seek bungalows and flats.

4.16                                                                                                                                                       Tables 4.8 and 4.9 summarise the need for affordable rented housing. The need is mostly for 1 and 2-bedroom dwellings with need for bungalows flats and houses.

It is noted that 86% of affordable need is for 1 & 2 bed homes

Affordable rented need arising from newly formed households

4.22                                                                                                                                                          The above cases were filtered by several factors to arrive at the quantity of households per annum requiring social rented housing in Faversham i.e. households were not counted unless they met all the following criteria:

  • not already living in a place of their own.
  • seeking a place of their own as opposed to permanently moving in with someone else.
  • could not afford entry level market renting or home ownership.
  • seeking their home in Faversham; and
  • seeking to rent from a housing association.

4.23                                                                                                                                                           79 households met all the above criteria. Their housing requirements are summarised in table 4.12.

The combined need is for 266 affordable rented homes was identified when the snapshot survey was undertaken in 2019.  Delivery has fallen significantly since then compounding the supply shortage.  Private landlords are also selling up which has further reduced supply.  Consequently, rents have escalated to unaffordable levels. This has further increased the demand for affordable rented tenure.

Shared Ownership – A Discredited form of Tenure

Whilst shared ownership is a gateway to home ownership it has been discredited in this era of high interest rates. The interest charge levied on the percentage of equity held by the Housing Association (the Freeholder) has increased significantly; shared ownership residents have suffered hardship in the recession. Shared Ownership buyers are tenants and as such can be evicted on many grounds, such as failure to pay rent, nuisance behaviour or sub-letting. Worse still, there is a risk that if evicted, shared ownership buyers could lose a portion of the home that they have already ‘bought’, since it is not owned in a fully legal sense until staircased up to 100%. The housing association is not legally obliged to reimburse owners if evicted – they are only legally entitled to be paid for their share on the sale of the property.   

There are other negative factors of shared ownership that have also caused problems -:  

  • Shared ownership buyers may not qualify for the first-time buyer stamp duty exemption. 
  • Shared ownership buyers have to pay a service charge to cover the maintenance of any communal parts of estates and buildings. 
  • Shared ownership properties are leasehold and homes with a short lease (of under 80 years) become increasingly hard to sell. 
  • Tenants are not allowed to sub-let a shared ownership property unless they have staircased to 100% ownership.  Whilst the buyer is allowed to let out one or more rooms to lodgers or flatmates, they must be living in the property permanently.

ALTERNATIVE ROUTES FOR RESOLVING THE APPLICANT’S AFFORDABLE DELIVERY PROBLEM

The applicants state in their covering letter that “Since execution of the agreement, Redrow Homes has engaged in discussions with numerous registered providers which have resulted in limited interest due to the significant number of 4 beds affordable dwellings proposed and the tenure split heavily weighted towards affordable rent.”

We note that the barriers to delivery relate to feasibility and not viability. The applicant’s proposal would significantly reduce the value of planning gain secured in the Agreement for the benefit of the community. This lost planning gain would go straight to the bottom line to enhance developer profit.

We are surprised that the applicants are now seeking to renegotiate this S106 Agreement. The contract was only signed last year!  We are also disappointed that they have only sought to juggle tenure as a solution to resolve the delivery issues. We suggest below two alternative solutions to resolve the problem which is caused by the reluctance of the Housing Associations to engage.

1

The application proposes to reopen the Section 106 agreement which provides an opportunity to negotiate alternative terms.  Consideration could perhaps be given to conceding the proposal, subject to the receipt of a commuted sum in lieu of the lost planning gain.

This could be calculated by appraising the difference between the affordable rent subsidy for the units where tenure has been switched, from the value of the unsold equity retained by the shared ownership provider.

The reopening of the Agreement also provides an opportunity to capture the subsidy value of a policy compliant allocation of social rented tenure.  This was evidently negotiated out of the original Agreement due to the cutting  of social rent grant by Government in support of their austerity programme.

Consideration could also be given to the payment of commuted sums for the absence of First Homes in the affordable mix.  Government Guidance for First homes (Paragraph: 012 Reference ID: 70-012-20210524) states: - Where cash contributions for affordable housing are secured instead of on-site units, a minimum of 25% of these contributions should be used to secure First Homes. This could be achieved, for example, by acquiring additional First Homes from market development, paying the developer a sum to offset the discount from market price, and securing the tenure through section 106 planning obligations.   

2                    

The heavy weighting of four bed houses in the approved mix is stated by the applicants to be the Root of the problem. They of course elected to specify this mix which was submitted contrary to the guidance in the Swale Housing Market Assessment 2020.  It is evident from the comparison table below that their chosen mix was unbalanced.  

There is no reason why, and it is indeed common practice, for applicants to submit S73    applications seeking to vary an approved mix.  It is noted that construction has commenced on site. Notwithstanding this, the applicants’ architects could review the layouts to the south of the site and easily replace an element of four/five-bedroom houses with apartment blocks. 

There are only 9 apartments in a single block plotted on the scheme.  The Faversham HNS identifies significant  demand for apartments at an affordable rent.  As explained above, this inadequate provision could be easily rectified under the umbrella of this application through plan substitution.   This course of action would additionally lead to the more efficient use of land and enhance Swales housing delivery targets.  We illustrate below a plan extract identifying three potential apartment sites.

Conclusion

There are robust planning grounds for refusal of this application.  We have suggested two alternative routes to mitigate against outright refusal.

  1. Renegotiation of the S106 agreement to provide a commuted sum to support homes that are designed to address local housing need on alternative sites in the town.
  2. Unblock the reticence of Housing Associations to engage through further amendment of the Affordable Housing Scheme to introduce more smaller units in apartment buildings.

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