This Supplementary Planning Guidance builds on the London Mayor’s long-term aim for half of all new homes in London to be affordable (as defined in the London Plan) but what does this mean for developers?

The overall aim for the new SPG is to provide an incentive for applicants to provide 35% affordable housing. The reasoning for a new SPG for affordable housing relates to a multitude of issues, including: a lack of housing supply in London, lack of genuinely affordable homes in London, the influx of 70,000 new Londoners every year, a new London plan and the previous approach  not delivering the required numbers of affordable housing.

The Threshold Approach

Fast Track Route

The fast track route ensures that schemes with 35% affordable housing on-site, without public subsidy, a correct tenure mix and meeting all planning requirements to the satisfaction of the LPA and Mayor are not required to submit viability information. However, this is subject to an early viability review only if an agreed level of progress is not made within 2 years of planning permission.

Viability Tested Route
With the viability tested route, schemes which do not provide 35% affordable housing must submit detailed viability information. If the Local Planning Authority or Mayor determines that more Affordable Housing could be supported, a higher level will be required. This could exceed the 35% threshold. Furthermore, early and late stage viability reviews will be applied, to ensure affordable housing is increased if viability improves over time.

Viability Assessments
Viability Assessments provide detailed guidance to create a standardised, consistent approach. It further sets out the Mayor’s preference for using ‘Existing Use Value Plus’ as the comparable Benchmark Land Value when assessing viability.

Build to Rent

Build to Rent is a specific guidance on Build to Rent developments, recognising that they differ to the traditional build for sale model. This provides:

  • Guidance on covenant and clawback arrangements if homes are sold
  • Promotes Discount Market Rent as part of the affordable homes offer
  • Preference for DMR to be let at London Living Rent levels
  • A flexible approach to mix and design if of exemplary design
  • Five key Build to Rent Management Standards

With these new changes to viability assessments,  the percentage of affordable housing should be measured by habitable rooms (habitable rooms in the affordable and market elements should be of a comparable size, but if they are not then it may be measured using habitable floorspace). Furthermore, Vacant Building Credit Policy will not be considered appropriate in London in most cases. Viability information should also now be made publicly available along with the all other application documents.

The SPG does not set new policy, but sets out guidance on how the existing adopted London Plan policies should be implemented.

If you are a developer, seeking advice on an existing or potential scheme, Fuller Long’s experienced consultants can help guide you through the process. We can provide you with advice on all types and scales of projects. To discuss your options, contact Gemma Davis at or call 0808 164 1288 for a no obligation conversation.