Comment

Representation ID: 10073

Received: 28/07/2022

Respondent: Countryside Partnerships Plc

Agent: Phillips Planning Services

Our client wishes to raise an objection to proposed policy DM1(S) of the Local Plan 2040 – Plan for Submission.

Our client raises concern that sites brought forward with the affordable housing split purely as 75% affordable/social rent and 25% First Homes (to be sold by the developer at a 50% discount) will mean many sites will be unviable to deliver, because:

1. The split does not appear to facilitate the provision of shared ownership within the tenure mix; and
2. The requirement for First Homes to be sold at a 50% discount may not be viable, and significantly exceeds the Government's starting point of 30% discount.

The current tenure split in Bedford Borough in Policy 58S of the Local Plan 2030 allows for 78% rent (social and/or affordable rent) and 22% other affordable tenures (i.e. shared ownership).

The current tenure split means that Registered Providers can offer on the full affordable housing, but in the new proposals, they would only be able to offer and provide the rented tenures, wiping out much needed and popular shared ownership housing from those in need but also from the Registered Providers themselves. Registered Providers rely upon shared ownership to cross-fund the provision of social rented. We therefore must object to the statement in paragraph 6.13, that proposes the removal of shared ownership from the policy tenure mix, in favour of suggesting shared ownership be brought forward in “other contexts.” This position does not appear to have considered the role that this tenure plays both in meeting affordability, and in its support of social and affordable rental.

Currently, shared ownership can be sold at only 25% equity share compared to the proposed 50% in first homes meaning a mortgage for families will be more out of reach going forward as they may use the 25% initial equity share to get on to the property ladder and eventually work up to more whilst aspiring to come out of affordable housing.

We are concerned therefore the First Homes proposal will penalise many first-time buyers, especially young families who rely on shared ownership to be able to buy their first family home.

Moreover, as a high level worked example if a 3 bedroom house valued at £300,000 was to be sold as a first home the 50% mortgage required would be prohibitive to many people on the affordable housing waiting lists such as first-time buyer young families, whereas in the current mix this same house would be able to be accessed with a mortgage on only 25% of the equity enabling such young family to be in this tenure of affordable housing instead of then burdening the affordable rent housing waiting lists. This could further exacerbate affordable rent waiting lists in the borough and increase the need for this tenure putting more pressure on the Local Authority.

The findings of the BNP Paribas Borough Wide Viability Study do not provide convincing evidence that the First Homes discount of 50% does not harm the viability of residential schemes coming forward. The statement in paragraph 8.8 of the viability report appears to accept that viability is questionable, that the 30% affordable housing provision is not itself completely justified, and reference to that target being generally achievable does not identify that this is either when tested against the “lower benchmark land value” or makes the assumption that “grown values and costs” will address the viability in the longer term. It also confirms in paragraph 8.11 that the proposed housing policy does not support the viability of Build to Rent schemes. In our opinion, there is an over-reliance upon growth and flexibility in the policy to address such matters on a site-by-site basis.

This conclusion supports our position that the viability of these proposals remains questionable, and our client, therefore, reserves the right at this stage to undertake their own viability assessment, and make further representations at the Examination.

We, therefore, contend that the policy as drafted could result in an adverse impact on affordability in the Borough, and harm the viability of future residential development. The policy is therefore not effective or justified and renders the plan UNSOUND.