Policy, guidance and other useful information

National Planning Policy and guidance

A new National Planning Policy Framework (NPPF) was adopted in July 2018 and updated in February 2019. With respect to development viability, the new NPPF emphasises that it is for planning applicants to demonstrate whether circumstances justify the need for a viability assessment to be submitted alongside a planning application. It also emphasised that viability assessments should be made publicly available, and that they should be formed with reference to National Planning Guidance.

The National Planning Guidance referred to above takes the form of the Viability Planning Practice Guidance (PPG) published by the Ministry for Housing, Communities and Local Government in July 2018 and updated in May 2019. This guidance places greater emphasis on viability testing being undertaken at the plan-making stage as opposed to the application stage. It provides guidance on approaches to undertaking viability testing at plan-making stage and sets out standard approaches to forming the inputs into viability assessments including relating to establishing Gross Development Value and Costs. This guidance also sets out that the primary approach to assessing land value should be one based on the existing use value of the site and that approaches need to fully reflect policy requirements. Viability PPG also emphasises that in normal circumstances viability assessments should be made publicly available and that non-technical Executive Summaries should be provided with full assessments.

Regional policy and guidance

The London Plan is the spatial development strategy for London. The current version was adopted in 2011 with alterations made in 2013 and 2016.

A new draft London Plan was the subject of Examination in Public Hearings between February and May 2019. It is likely that this document will be adopted in early 2020. In terms of provisions relating to affordable housing and viability, this document sets out a number of strategic requirements, including a strategic affordable housing target of 50% and the threshold approach to affordable housing which is consistent with and refers to the Homes for Londoners Affordable Housing and Supplementary Planning Guidance (SPG).

The Mayor of London published the Homes for Londoners Affordable Housing and Viability SPG in August 2017. The SPG introduced the threshold approach to affordable housing which is applicable in circumstances where planning applications meet or exceed 35 per cent affordable housing provision and 50% on public and industrial land. In these instances, schemes will follow a fast track route and are not required to submit viability information. Schemes that do not meet these requirements must follow a viability-tested route where they are required to submit viability information and provide late stage review mechanisms within S106 Agreement.

Local policy guidance

A number of authorities have adopted specific guidance relating to viability:

Development Viability Supplementary Planning Document (SPD)

London Borough of Islington

London Borough of Lambeth

London Borough of Merton

London Borough of Southwark

London Borough of Tower Hamlets

Affordable Housing and Viability (SPD)

London Borough of Waltham Forest

Financial Viability Planning (SPD)

Royal Borough of Kingston upon Thames