In Summer 2024, Viable Placemaking were approached to provide expert viability and economic advice to support a residential development in Hackney. The scheme was, at that time, awaiting pre-application advice and the applicant had wisely began collating quotes from several consultants to provide expert reports as part of the full application - this including ecology, highways, and viability.
Several months later, following liaison with the local planning authority, Hackney Council, and updates to the design, Viable Placemaking were instructed to support with the viability and economic matters relating to the development.
Firstly, we conducted extensive research into the status of the site, which had fallen into disarray and had remained vacant for some time prior to the application. These circumstances are often seen in development projects in London, where there is limited land but an exceptional need for housing, which has only been exacerbated by the recently updated housing land supply requirements alongside the December 2024 NPPF. Importantly, this had significant impacts on the values and costs at play within the proposed development, which were an important factor in the viability of the scheme.
Additionally, Hackney Council have a very strict affordable housing policy, which requires contributions from small schemes, including those providing only one new home. You can read more about Hackney's affordable housing policy in our dedicated Insight, available here. At this site, the Council would ordinarily look for a financial contribution of £50,000 to be provided through a Section 106 agreement (S106). A S106 agreement is a legal agreement, under 'section 106' of the Town and Country Planning Act 1990, through which a Council can link a planning obligation, such as affordable housing, to a development.
Following our full reviews of the site, costs, and policies, we were able to provide an Affordable Housing Viability Assessment to accompany the planning application. This report comprehensively reviewed the financial implications of the development, concluding that the development was 'unviable' in the context of Hackney's affordable housing policy and, therefore, no contribution should be required.
In this instance, the key factor was the increased build costs as a result of the site status. Although this had correlated implications for the benchmark land value, the overarching conclusion that the development could not provide a contribution towards affordable housing was incontrovertiable.
In addition, following review of the applicant's specific circumstances and the development, we were able to support one of the units being brought forward as a self-build unit, which shall reduce the Community Infrastructure Levy (CIL) liability of the development.
Overall, including legal fees, it is expected that over £100,000 of unviable developer contributions have been saved. The scheme will be brought forward to planning with no affordable housing contribution and one self-build unit, within a wider development.
Viable Placemaking is committed to providing all types of housing, including open market and affordable housing, where it is viable and deliverable at a site, to meet the needs of the community. As a town planning consultancy with a specialism in development economics and viability, we frequently work with applicants, developers, architects, and fellow planning consultants to support with the viability and economic factors of a development.
If you have a development which you think is unviable, or if you would like to learn more about the viability process, please don’t hesitate to get in touch.