The delivery of affordable housing is a key Government objective aimed at enabling everyone to have a decent home that they can afford. However, through the new Local Plan we believe the provision of affordable housing -linked to open market housing development- must be realistic with regard to economic viability and at the same time flexible to variations between sites and changes in market conditions over the plan period.

In the Council's Affordable Housing Viability Assessment (AHVA, Nov 2011) it is recognised that most residential developments are presently not only expected to provide affordable housing as part of Section 106 Agreements, but also to contribute to other costs imposed by the local authority on the development, such as highway works, provision of community facilities, education payments, etc. These additional development cost were therefore taken into account by factoring in an allowance of £6,650 per unit for S106 contributions under each the viability scenario tested; an average contribution figure on recently approved schemes in Warwick District. By comparison, in the Draft Infrastructure Plan we note that the total indicative cost for highway infrastructure alone is in the region of £48m or approximately £5,000 per new home.

At this time, therefore, while the full costs of infrastructure required to deliver the Plan and thus the CIL rate which the Council intends to charge remain unknown, we consider that it is premature for the Council to require any specific affordable housing percentage requirement. Furthermore, we note that the SMHA recommended an affordable housing target of 30%, while in the AHVA a 40% affordable housing target was only considered viable across the district under 'improved market conditions' i.e. similar conditions to those seen in early 2007. However, average house prices are not forecast to hit 2007 levels again until 2018 (UK housing market forecast, Knight Frank). The current downturn in residual land values will obviously have a considerable impact on the viability development schemes especially in Phase1 of the plan and this factor should be reflected in a revised policy PO5.

In response to these conditions, we believe to ensure that Policy PO5 is truly flexible the Council should:

* Set an affordable housing target which covers the lifetime of the Local Plan subject to monitoring of changing housing need and market conditions.

* Negotiate the overall quantity, type and tenure of on-site affordable housing on a site-by-site basis, having regard to scheme viability; viability assessments should not simply be based on addressing particular on-site constraints.