Research conducted by Shelter has revealed that developers are exploiting a legal loop hole to avoid building affordable housing. The figures show that in the past 12 months 79% of the required affordable homes were not released within government guidelines, this means 2500 fewer homes across 11 local authorities where this study was conducted.
The loop hole being exploited basically means that the developer can use a viability assessment to that they can’t afford to build the affordable home without their profit margins dropping below 20%. If they demonstrate this, there is no penalty faced for not providing the required quota of affordable homes!
The city’s worst affected by this issue are Manchester, Birmingham and London. Which are, of course, the cities where residents most need affordable housing!
The CEO of Shelter, Polly Neat, has urged local governments to amend planning laws to close this loophole. Ms. Neat stated: “This research reveals the scale at which developers are able to use legal loopholes to protect their profits and dramatically reduce the number of affordable homes available for people.”