Lewisham Affordable Housing Policy

The London Borough of Lewisham’s Local Plan (adopted July 2025) sets out a strong strategic imperative to deliver genuinely affordable homes as a core part of its growth strategy to 2040.

Policy HO3 is the key provision that shapes how affordable housing is delivered and tested on new developments.

Affordable Housing Target and Thresholds

Policy HO3 sets out Lewisham's target that 50% of all new homes will be affordable, seeking the maximum amount of genuinely affordable housing on new developments.

Major developments are always expected to provide a contribution towards affordable housing, in line with national policy.

In Lewisham, minor developments of 2-9 units are also expected to provide a provision under the small sites requirements.

Major Developments

For major developments, including mixed use schemes with the capacity to accommodate 10 or more dwellings, should deliver the maximum amount of genuinely affordable housing.

It is expected that this should be delivered on site and in line with the London Plan policies (including H5) and the Government's national Planning Practice Guidance on Viability.

A tenure mix of approximately 70% genuinely affordable (social or London Affordable Rent) and 30% intermediate (London Living Rent or shared ownership) is the Council's the baseline.

The Council also allows for the inclusion of late review mechanisms to maximise affordable housing delivery and manage economic uncertainties throughout the lifetime of a development.

Small Sites

Lewisham seeks affordable housing provision, via either on-site delivery or financial contributions, on minor developments (2–9 units).

The underlying requirement for affordable housing on minor developments is set out at Table 7.2 of the Local Plan. This details the equivalent number of on-site affordable units which is to be used to calculate the payment in lieu of on-site delivery.

Proposed number of units	Equivalent number of on-site affordable units to be used to calculate payment in lieu
2	0.70
3	1.05
4	1.40
5	1.75
6	2.10
7	2.45
8	2.80
9	3.15

Essentially, the equivalent number is equal to 35% of the proposed number of units.

The Council have a detailed formula for claculating payments in lieu, which is included in their Local Plan. Viable Placemaking have experience in supporting developers calculate their small site contribution as part of Affordable Housing Statements and Viability Assessments.

The Council also recognises aggregate developments which are a key consideration in the delivery of affordable housing and the overall viability of developments. Due to previous experience with Aggregate Developments, we have a dedicated Insight on these projects, which is available here.

Viability

Contributions towards affordable housing are subject to viability. That means that if a development is agreed to be unviable, it will not need to provide a contribution.

A Viability Assessment will fully evaluate the values and costs associated with your scheme to understand whether any developer contributions, including affordable housing, should be provided.

Any evaluation of viability would need to be transparent and objective. This should also be conducted in line with the London Plan and Mayor’s Affordable Housing and Viability SPG.

Therefore, if you believe that a contribution towards affordable housing would make your development unviable, you might consider submitting a Viability Assessment with your application.

Vacant Building Credit and Other Types of Developments

The Council's affordable housing policy applies to conventional housing (under Use Class C3), student accommodation and, where appropriate, specialist supported accommodation.

Other policies in the Local Plan, including HO7 (purpose built student accommodation), set out details of how affordable housing delivery will be applied.

Where developments deliver at least 35% affordable housing, they will be considered favourably and may be eligible to enter via the Fast Track Route.

Additionally, the Council have stated that the application of Vacant Building Credit is not appropriate in Lewisham. This will be considered in limited cases where there is robust evidence. This includes the fact that the building has not been made vacant for the sole purpose of redevelopment.

Any Questions?

Viable Placemaking are a town planning consultancy with a specialisms in housing needs, development economics, and viability.

We frequently work with applicants, developers, and fellow planning consultants to support in schemes delivering affordable housing, demonstrating housing needs, and navigating the viability matters within a planning application.

If you have any questions about Lewisham's Local Plan or the viability process, please don't hesitate to get in touch and we would be more than happy to help.