Affordable Housing SPD

(6) Appendices

Appendix i – Local Plan Policies

Strategic Policy DS2 – Providing the homes the district needs

The Council will provide in full for the Objectively Assessed Housing Need of the district and for unmet housing need arising from outside the district where this has been agreed. It will ensure new housing delivers the quality and mix of homes required, including:

1. Affordable homes
2. A mix of homes to meet identified needs including homes that are suitable for elderly and vulnerable people; and
3. Sites for gypsies and travellers

H0 – Housing

To ensure the district has the right amount, quality and mix of housing to meet future needs this Plan will:

1. Provide in full for the district's housing requirement
2. Ensure new housing development is in locations which enable sustainable lifestyles, protect the aspects of the district that are most highly valued and which, where appropriate, support and regenerate existing communities; and
3. Ensure new housing delivers the quality and mix of homes needed in the district including affordable homes, a mix of homes to meet identified needs (including homes that are suitable for older and vulnerable people) and sites for gypsies and travellers.

H1 – Directing New Housing

Housing development will be permitted in the following circumstances:

5. Elsewhere in the open countryside; where:
1. the development is for rural affordable housing in accordance with Policy H3;

H2 – Affordable Housing

Residential development on sites of 11 or more dwellings or where the combined gross floor space is more than 1,000 sq.m will not be permitted unless provision is made for 40% affordable housing.

The amount of affordable housing, the form of provision, its location on the site and the means of delivery of the affordable element of the proposal will be subject to negotiation at the time of a planning application. The viability of the development will be a consideration in such negotiations.

Planning permission will not be granted until satisfactory arrangements have been made to secure affordable housing as determined by the following principles:-

1. The affordable housing will be provided on site as either serviced land or dwellings, or a combination of the two;
2. The sizes, types and tenures of homes provided will be determined on the basis of local need as identified in the Strategic Housing Market Assessment and, where appropriate, by other local needs surveys and information;
3. The accommodation provided will be genuinely available to those households who have been identified as being in housing need;
4. The affordable housing will be well integrated into the overall scheme along with the market housing with consistent qualities of materials, design and open spaces;
5. The affordable housing will meet the definition of affordable housing set out in Annex 2 of the National Planning Policy Framework (NPPF) in terms of tenure, eligibility and provider. If the NPPF is replaced by later national guidance while this policy H2 remains in force then, at the time of consideration of a planning application, the definition of affordable housing shall be taken to be as defined in such later national guidance.
6. The affordable housing will be built within an agreed timescale; and
7. The affordable housing will be available as such in perpetuity, where practicable, and only to those with a demonstrable housing need.

The Council will, in exceptional circumstances, accept contributions of equivalent value in lieu of on-site delivery. This should include financial contributions, land or off-site provision of affordable homes. In such cases, the developer will be required to demonstrate why on-site delivery is not practical.

H3 – Affordable housing on rural exception sites

The development of affordable housing to meet the local needs of a village or parish may be permitted in locations which would not normally be released for housing, provided that:

1. the proposal will meet a particular local housing need, as identified in detailed and up to date evidence from a parish or village housing needs assessment, and it can be demonstrated that the need cannot be met in any other way;
2. the proposed development will be small in scale, of appropriate design and located within, or adjoining, an existing settlement; and
3. the following principles are established:
   1. all of the housing provided will only be available (both initially and for subsequent occupancies) to those with a demonstrable housing need and, first and foremost, to those with a need to be housed in the locality;
   2. the type of accommodation, in terms of size, type and tenure, to be provided will reflect the needs identified in the housing needs assessment;

In locations outside of the green belt, the Council will consider the cross-subsidisation of the affordable homes with some market homes provided that:

1. the number of market homes is the minimum necessary to deliver the affordable housing;
2. the size and type of the market homes meet a local need as evidenced in a parish or village housing needs assessment; and
3. a development appraisal is provided to the Council as supporting evidence.

Appendix ii – NPPF definition of affordable housing

Paragraph 61

Within this context, the size, type and tenure of housing needed for different groups in the community should be assessed and reflected in planning policies (including, but not limited to, those who require affordable housing, families with children, older people, students, people with disabilities, service families, travellers, people who rent their homes and people wishing to commission or build their own homes).

Paragraph 62

Where a need for affordable housing is identified, planning policies should specify the type of affordable housing required, and expect it to be met on-site unless:

1. off-site provision or an appropriate financial contribution in lieu can be robustly justified; and
2. the agreed approach contributes to the objective of creating mixed and balanced communities.

Paragraph 63

Provision of affordable housing should not be sought for residential developments that are not major developments, other than in designated rural areas (where policies may set out a lower threshold of 5 units or fewer). To support the re-use of brownfield land, where vacant buildings are being reused or redeveloped, any affordable housing contribution due should be reduced by a proportionate amount.

Paragraph 64

Where major development involving the provision of housing is proposed, planning policies and decisions should expect at least 10% of the homes to be available for affordable home ownership, unless this would exceed the level of affordable housing required in the area, or significantly prejudice the ability to meet the identified affordable housing needs of specific groups. Exemptions to this 10% requirement should also be made where the site or proposed development:

1. provides solely for Build to Rent homes;
2. provides specialist accommodation for a group of people with specific needs (such as purpose-built accommodation for the elderly or students);
3. is proposed to be developed by people who wish to build or commission their own homes; or
4. is exclusively for affordable housing, an entry-level exception site or a rural exception site.

Paragraph 71

Local planning authorities should support the development of entry-level exception sites, suitable for first time buyers (or those looking to rent their first home), unless the need for such homes is already being met within the authority's area. These sites should be on land which is not already allocated for housing and should:

1. comprise of entry-level homes that offer one or more types of affordable housing as defined in Annex 2 of this Framework; and
2. be adjacent to existing settlements, proportionate in size to them33, not compromise the protection given to areas or assets of particular importance in this Framework34, and comply with any local design policies and standards.

Paragraph 77

In rural areas, planning policies and decisions should be responsive to local circumstances and support housing developments that reflect local needs. Local planning authorities should support opportunities to bring forward rural exception sites that will provide affordable housing to meet identified local needs, and consider whether allowing some market housing on these sites would help to facilitate this.

The NPPF provides the following definition of affordable housing (Annex 2):

Affordable housing: housing for sale or rent, for those whose needs are not met by the market (including housing that provides a subsidised route to home ownership and/or is for essential local workers); and which complies with one or more of the following definitions:

1. Affordable housing for rent: meets all of the following conditions: (a) the rent is set in accordance with the Government's rent policy for Social Rent or Affordable Rent, or is at least 20% below local market rents (including service charges where applicable); (b) the landlord is a registered provider, except where it is included as part of a Build to Rent scheme (in which case the landlord need not be a registered provider); and (c) it includes provisions to remain at an affordable price for future eligible households, or for the subsidy to be recycled for alternative affordable housing provision. For Build to Rent schemes affordable housing for rent is expected to be the normal form of affordable housing provision (and, in this context, is known as Affordable Private Rent).
2. Starter homes: is as specified in Sections 2 and 3 of the Housing and Planning Act 2016 and any secondary legislation made under these sections. The definition of a starter home should reflect the meaning set out in statute and any such secondary legislation at the time of plan-preparation or decision-making. Where secondary legislation has the effect of limiting a household's eligibility to purchase a starter home to those with a particular maximum level of household income, those restrictions should be used.
3. Discounted market sales housing: is that sold at a discount of at least 20% below local market value. Eligibility is determined with regard to local incomes and local house prices. Provisions should be in place to ensure housing remains at a discount for future eligible households.
4. Other affordable routes to home ownership: is housing provided for sale that provides a route to ownership for those who could not achieve home ownership through the market. It includes shared ownership, relevant equity loans, other low cost homes for sale (at a price equivalent to at least 20% below local market value) and rent to buy (which includes a period of intermediate rent). Where public grant funding is provided, there should be provisions for the homes to remain at an affordable price for future eligible households, or for any receipts to be recycled for alternative affordable housing provision, or refunded to Government or the relevant authority specified in the funding agreement.

Appendix iii – Template Section 106 agreement
THIRD SCHEDULE
The Owner's Covenants with the Council
Part 1: Affordable Housing

1.1 Prior to the Commencement of Development the Owner shall submit the Affordable Housing Scheme for the approval of the Council and shall notify the Council in writing of the anticipated date for completing the construction of the Affordable Housing Units within the Development and shall use reasonable endeavours (and shall demonstrate to the reasonable satisfaction

of the Council that such endeavours have been made) to enter into a binding contract ("the Contract") with a Registered Provider for the construction and sale of the Affordable Housing Units within 6 months of the date of Commencement of the Development to such Registered Provider at a price in accordance with paragraph 1.2.

1.2 The price to be paid by the Registered Provider to the Owner for the transfer of the Affordable Housing Units shall be a percentage of the value of the properties if they were sold on the open market (as at the intended date of the exchange of contract in respect of the Affordable Housing Units) to be agreed between the Owner and the Registered Provider being such a percentage to enable the Affordable Housing Units to be made available without the need for the Registered Provider to apply for Homes England grant funding and to enable the Shared Ownership Units to be made available to purchasers at a mortgage cost of each unit to be no more than three and a half times the average household income of newly forming households within Warwick District

1.3. The terms of the Contract relating to the type and size of the Affordable Housing Units and the rent to be paid for the Affordable Rented Units shall be in full accordance with the Affordable Housing Scheme and the Contract shall provide for the transfer of the freehold or leasehold title of the Affordable Housing Units on the following terms:

1.3.1 The Owner will deduce good and marketable freehold or leasehold title to the Affordable Housing Units and will transfer the Affordable Housing Units with full title guarantee with vacant possession and subject to all existing entries under title number [insert title no.] as at the date of this Deed but otherwise the transfer shall be free from any other rights or encumbrances save for any existing rights and encumbrances and such other rights reservations and covenants as are reasonably necessary to enable the Owner to develop the rest of the Application Site and those disclosed as at the date of this Deed;

1.3.2. The Transfer shall grant rights of access and passage of services and other rights reasonably necessary for the beneficial enjoyment of the Affordable Housing Units

1.4. The Owner covenants that the Affordable Housing Units shall be allocated to persons registered on Home Choice Allocation Schemes.

1.5. The Affordable Housing Units shall not be Occupied other than as Affordable Housing SAVE THAT this Deed SHALL NOT be binding or enforceable against any mortgagee or chargee or receiver appointed by the mortgagee or chargee which shall have the benefit of a legal mortgage or charge secured against all or any of the Affordable Housing Units and any person who shall derive title directly or indirectly from such mortgagee or chargee or receiver appointed by the mortgagee or chargee (other than a Registered Provider) Provided Always that the mortgagee or chargee or receiver appointed by the mortgagee or chargee or any successors in title to such mortgagee, chargee or receiver shall have obtained a Certificate from the Council (acting reasonably) stating that it has followed the procedure set out in the Seventh Schedule to this Deed nor shall this Deed be binding or enforceable against any Protected Tenant

1.6. Subject always to paragraphs 1.5, 1.9 – 1.14 below the Owner covenants not to dispose of their interest in the freehold of the Affordable Housing Units or any part thereof (except by way of mortgage) other than to a Registered Provider

1.7. The Owner covenants that it will require in the contract that the Registered Provider shall keep the Council's Housing Strategy & Development Officer for the time being informed in writing as to the addresses of the Affordable Housing Units

1.8. The Owner covenants to require in the Contract that the rent to be charged by the Registered Provider for the Social Rented Units when first let and for all subsequent lets must conform

to Regulator of Social Housing's 'Regulatory Framework for Social Housing in England from April 2015' or such other amount as may be permitted by any subsequent publication then in force and the rate of increase shall be no greater than the rate stipulated in Annex A of aforementioned publication or if such rate of increase shall cease to be or otherwise not stipulated by the Regulator of Social Housing the rents shall be increased by no greater than Retail Price Index + 1% per annum.

1.9. If despite having used reasonable endeavours the Owner is unable to enter into a contract with a Registered Provider for the sale of the Affordable Housing Units in accordance with the provisions of this Schedule within 6 months from the Commencement of Development then the Owner may at any time afterwards give notice to the Council ("the First Affordable Housing Notice") stating that it has failed to enter into a Contract in which event the provisions of paragraph 1.10 shall apply

1.10. If the Owner serves a First Affordable Housing Notice in respect of the Development then the Council may at any time within 3 months of the service of the First Affordable Housing Notice nominate by written notice to the Owner ("the Nomination Notice") any other affordable housing provider ("the Nominee") to purchase the Affordable Housing Units within that Development for an alternative affordable housing scheme proposed by the Owner and as approved by the Council but otherwise on the terms set out in this Schedule.

1.11. If the Council serves a Nomination Notice in respect of the Development in accordance with paragraph 1.10 the Owner shall use reasonable endeavours (and shall demonstrate to the reasonable satisfaction of the Council that such endeavours have been made) to enter into a contract with the Nominee for the sale of the Affordable Housing Units within the Development in accordance with the provisions of this Schedule within 6 months of the date of service of the Nomination Notice.

1.12. If after service of the First Affordable Housing Notice the Council fails to serve a Nomination Notice or following the service of a Nomination Notice within 6 months of the Owner having used their reasonable endeavours fail to enter into a Contract with the Nominee within 6 months of the date of service of the Nomination Notice in accordance with paragraph 1.11 then the Owner shall make an offer in writing to transfer the Affordable Housing Units in a Serviced Condition to the Council, freehold, free from incumbrances, with vacant possession and with full title guarantee for a price of the lower of the actual build costs of the Affordable Housing Units as demonstrated by the Owner on an open-book basis or a valuation-based estimate of the Affordable Housing Units to be carried out by the Valuation Office Agency and the Council shall confirm in writing within 14 days whether it will accept the offer and if accepted then on completion of such transfer the Owner shall be deemed to have provided the full number of Affordable Housing Units in discharge of their obligations under this Schedule.

1.13. If the offer described in paragraph 1.12 above is not accepted by the Council then the Owner may serve a notice on the Council (the "Payment Notice") stating that it will pay to the Council a sum (the "Housing Contribution") which will be calculated by the Council in accordance with the Eighth Schedule in place of the Owner providing the Affordable Housing Units and the provisions of paragraph 1.14 shall take effect.

1.14. On service of the Payment Notice in respect of the Development then:

1.14.1. The Owner shall pay to the Council the Housing Contribution within 20 working days of the Payment Notice being served on the Council;

1.14.2. On payment of the Housing Contribution the Owner shall be entitled to sell or otherwise dispose of the Affordable Housing Units as Open Market Housing Units free of all obligations and restrictions

1.15. The Owner covenants with the Council that the Affordable Housing Units to be built on the Application Site shall be constructed according to the standards required by building regulations in force at the relevant time

1.16. The Owner covenants that the Affordable Housing Units shall be provided for disposal to a Registered Provider in a Serviced Condition and in any event of any disagreement as to whether the Affordable Housing Units are in a Serviced Condition a dispute shall be taken to have arisen which shall be dealt with under the provisions of Clause 17 of this Deed

1.17. Where all or some of the Affordable Housing Units shall be provided for disposal to a Registered Provider or the Council the Owner covenants with the Council not to cause suffer or permit Occupation of more than 50% of the Open Market Housing Units until 50% of the Affordable Housing Units have been transferred in a Serviced Condition to a Registered Provider or the Council in accordance with the provisions of this Schedule.

1.18. If 1.17 applies the Owner covenants with the Council not to cause suffer or permit Occupation of more than 95% of the Open Market Housing Units until all of the Affordable Housing Units have been transferred in a Serviced Condition to a Registered Provider or the Council in accordance with the provisions of this Schedule and any outstanding Housing Contribution (if any) has been paid to the Council in accordance with the provisions of this Schedule.

1.19. The Owner covenants with the Council to notify the Council's Housing Strategy & Development Officer of sales of the Open Market Housing Units in stages of 25% within 14 days of completion of the sale of the last Open Market Housing Unit in each stage of 25%.

Seventh Schedule

Mortgagee in Possession

1. The covenants contained in this Deed shall not be binding on a mortgagee or chargee or receiver appointed by the mortgagee or chargee (or administrative receiver) which shall have the benefit of a legal mortgage or charge secured against any of the Affordable Housing Units ("the Mortgaged Properties") or any person who shall derive title directly or indirectly from such mortgagee or chargee or receiver (or administrative receiver) appointed by the mortgagee or chargee ("the Mortgagee") (except in the case of a purchaser which is a Registered Provider of Social Housing) PROVIDED THAT the following procedure shall have been followed in all respects:

1.1 The Mortgagee acting pursuant to an event of default shall:

1.1.1 first serve written notice on the Council's Head of Housing Services of its intention to seek possession of the Mortgaged Properties no less than seven days prior to the commencement of such action.

1.1.2 at the time it commences such action send copies of any notices or other documents served in relation to such action to the Council's Head of Housing Services.

1.1.3 use its reasonable endeavours to the reasonable satisfaction of the Council's Head of Housing Services over a period of 12 weeks from the date on which it serves notice pursuant to paragraph 1.1.1. to dispose of the Mortgaged Properties to a Registered Provider of Social Housing approved in writing by the Council (such approval not to be unreasonably with-held or delayed) on terms which are reasonable in all respects to enable the same to be used for the purposes specified in this Deed and for a consideration determined in accordance with paragraph 7 below.

2 If the Mortgagee is unable within the said period of 12 weeks to dispose of the Mortgaged Properties in accordance with paragraph 1.1.3 and the Council shall have certified in writing that it is satisfied that the Mortgagee has complied with paragraph 1.1.3 (or the Mortgagee has issued a Deemed Certificate) then the Mortgagee shall be entitled to sell or otherwise dispose of the Affordable Housing Units as Open Market Dwellings free from all obligations or restrictions insofar as they relate to the use and occupation of the Affordable Housing

3 The Mortgagee shall provide written progress reports to the Council showing the steps it has taken to comply with Paragraph 1.1.3 above at 4, 8, 10 and 12 weeks from the date on which it served notice pursuant to paragraph 1.1.1. Such reports shall include:-

3.1. The names addresses and contact details of the registered providers of social housing which it has approached with a view to disposing of the Mortgaged Properties.

3.2 Any valuation of the Mortgaged Properties carried out at that time on the behalf of the Mortgagee.

3.3. Details of any part played by the Regulator of Social Housing and the details of the contact at the Regulator of Social Housing

3.4 Any written offers made by a registered provider of social housing to purchase the Mortgaged Properties.

3.5 The acceptance by the Mortgagee of an offer made in accordance with sub paragraph 3.4 above.

3.6 Written consent authorising any registered provider of social housing which the Mortgagee has approached with a view to disposing of the Mortgaged Properties and the Regulator of Social Housing to disclose the details of any confidential negotiations relating to such disposal to the Council.

3.7 Any other information relating to the disposal of the Mortgaged Properties that the Mortgagee considers appropriate

4 The Council shall within 14 days of the expiry of the 12 week period provided for in paragraph 2 above deliver to the Mortgagee a certificate stating whether or not the Mortgagee has complied with the provisions of paragraph 1.1.3. In the event that the Council certifies that the Mortgagee has not complied with the provisions of paragraph 1.1.3 such certificate will state what steps the Mortgagee must take to secure such compliance. If the Council has not delivered the above certificate to the Mortgagee within the above period of 14 days (or the arbitrator referred to in paragraph 6 below confirms that the Mortgagee has complied with the provisions of paragraph 1.1.3) the Mortgagee shall be entitled to certify that it has complied with paragraph 1.1.3 ("The Deemed Certificate ") and such certificate shall operate as a deemed certificate of satisfaction for the purposes of paragraph 2

5 Paragraph 4 above shall not prevent the Council from delivering to the Mortgagee a certificate stating whether or not the Mortgagee has complied with the provisions of paragraph 1.1.3 at any time following 4 weeks from the date that the Mortgagee served the notice pursuant to paragraph 1.1.1.

6 In the event that the Council has delivered a certificate in accordance with paragraph 4 above and there is a dispute between the parties in relation to whether the Mortgagee has complied with the provisions of paragraph 1.1.3 then either party may elect to refer such dispute to be determined by arbitration by a person appointed by the President for the time being of the Law Society

7 The consideration in accordance with paragraph 1.1.3 above shall be determined subject to any leases or tenancies subsisting the amount of such consideration to be agreed between the Registered Provider of Social Housing and the Mortgagee and failing such agreement to be determined by a Member of the Royal Institution of Chartered Surveyors acting as an expert and not as an arbitrator to be appointed by joint agreement of the parties or in default of agreement on application by either party by the President for the time being of the Royal Institution of Chartered Surveyors (the cost of his appointment and acting to be met by the parties in equal shares) and for the avoidance of doubt such consideration shall not be less than the amount due and outstanding to the Mortgagee under the terms of the mortgage or charge including all principal monies interest and costs and expenses incurred by the Mortgagee in respect of the mortgage or charge

8. Provided that at all times the rights and obligations in this Seventh Schedule shall not require the Mortgagee to act contrary to its duties under the charge or mortgage

EIGHTH SCHEDULE

The Housing Contribution