2 minutes reading time
(499 words)
Regeneration or Retreat on Affordable Housing?
There is a pattern emerging in large regeneration schemes.
Planning permission is granted on the basis that 30 or 35 percent of the homes will be affordable. The scheme is approved. The headlines are positive. Councils speak about delivery. Developers speak about revitalising town centres.
Then, a year or two later, viability is revisited. Costs have risen. Interest rates have shifted. Build inflation has bitten. Suddenly the affordable housing offer drops to 20 percent, sometimes lower.
It would be interesting to know how often this happens quietly across the country.
The recent debate around schemes involving major developers such as Landsec has brought the issue back into the open. The arithmetic of development viability is real. Construction costs rose sharply after lock-down. Financing remains more expensive than it was. Compliance obligations have increased. On paper, those pressures alter margins quickly.
Yet there is a wider question about timing and leverage.
Once planning permission is secured, the political momentum is with delivery. A stalled scheme delivers no homes at all. A reduced scheme delivers something. That tension often frames negotiations between councils and developers when viability reviews are submitted under Section 106 agreements.
For many observers, it creates a trust issue.
Communities are told that regeneration will include a meaningful proportion of affordable housing. If that proportion reduces significantly, it can feel less like regeneration and more like retreat.
There is also the perception around quality. Affordable homes are not legally allowed to be inferior. They must comply with the same Building Regulations and safety standards. Yet visually, differences are sometimes noticeable. Separate cores. Different specifications. Fewer upgrades. The optics matter, even where compliance is fully met.
The national ambition to deliver 1.5 million new homes within the lifetime of this Parliament sits alongside local authority waiting lists that remain stubbornly high. When a headline figure shifts from 35 percent to 20 percent, the social impact is not abstract.
Regeneration sites are finite opportunities. Shopping centre redevelopments are unlikely to come around twice. If affordable housing shrinks at that stage, the long-term community mix is altered for decades.
The viability process itself is technical. Open-book appraisals, profit assumptions, land values and review clauses all shape the final outcome. Development is complex. Land values, profit expectations and phasing risk are not imaginary constructs. They determine whether cranes move or remain idle.
Still, one wonders whether affordable housing too often becomes the flex variable when pressure mounts.
This week on Property Quorum, Gareth Wax will be joined by Silas J Lees, Juliet Baboolal, Zahrah Aullybocus and myself, Hamish McLay, as we look at how affordable housing commitments shift during viability reviews, and what that means for delivery, trust and long-term regeneration.
Property Quorum airs live at 10am on Thursday.
Watch live or catch up here: https://www.youtube.com/@SpillingTheProper-Tea
For content enquiries:This email address is being protected from spambots. You need JavaScript enabled to view it.
For podcast/media info:This email address is being protected from spambots. You need JavaScript enabled to view it.
Planning permission is granted on the basis that 30 or 35 percent of the homes will be affordable. The scheme is approved. The headlines are positive. Councils speak about delivery. Developers speak about revitalising town centres.
Then, a year or two later, viability is revisited. Costs have risen. Interest rates have shifted. Build inflation has bitten. Suddenly the affordable housing offer drops to 20 percent, sometimes lower.
It would be interesting to know how often this happens quietly across the country.
The recent debate around schemes involving major developers such as Landsec has brought the issue back into the open. The arithmetic of development viability is real. Construction costs rose sharply after lock-down. Financing remains more expensive than it was. Compliance obligations have increased. On paper, those pressures alter margins quickly.
Yet there is a wider question about timing and leverage.
Once planning permission is secured, the political momentum is with delivery. A stalled scheme delivers no homes at all. A reduced scheme delivers something. That tension often frames negotiations between councils and developers when viability reviews are submitted under Section 106 agreements.
For many observers, it creates a trust issue.
Communities are told that regeneration will include a meaningful proportion of affordable housing. If that proportion reduces significantly, it can feel less like regeneration and more like retreat.
There is also the perception around quality. Affordable homes are not legally allowed to be inferior. They must comply with the same Building Regulations and safety standards. Yet visually, differences are sometimes noticeable. Separate cores. Different specifications. Fewer upgrades. The optics matter, even where compliance is fully met.
The national ambition to deliver 1.5 million new homes within the lifetime of this Parliament sits alongside local authority waiting lists that remain stubbornly high. When a headline figure shifts from 35 percent to 20 percent, the social impact is not abstract.
Regeneration sites are finite opportunities. Shopping centre redevelopments are unlikely to come around twice. If affordable housing shrinks at that stage, the long-term community mix is altered for decades.
The viability process itself is technical. Open-book appraisals, profit assumptions, land values and review clauses all shape the final outcome. Development is complex. Land values, profit expectations and phasing risk are not imaginary constructs. They determine whether cranes move or remain idle.
Still, one wonders whether affordable housing too often becomes the flex variable when pressure mounts.
This week on Property Quorum, Gareth Wax will be joined by Silas J Lees, Juliet Baboolal, Zahrah Aullybocus and myself, Hamish McLay, as we look at how affordable housing commitments shift during viability reviews, and what that means for delivery, trust and long-term regeneration.
Property Quorum airs live at 10am on Thursday.
Watch live or catch up here: https://www.youtube.com/@SpillingTheProper-Tea
For content enquiries:
For podcast/media info:
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