TKP Discussion Paper on Cross-Subsidy within Rural Exception Schemes

Tetlow King Planning has released a discussion paper on the use of cross-subsidy funding from general market housing within rural exception affordable housing schemes. The paper has been put together independent of any client instructions, in order to stimulate further debate on what is a very contentious issue during the consultation period on the draft National Planning Policy Framework (NPPF) which runs to 17 October 2011.

Over the history of rural exception schemes going back to the early 1990s they have traditionally comprised entirely of 100% affordable housing guaranteed to remain as such in perpetuity; with limitations on any sales or staircasing of shared equity tranches. The current guidance contained in PPS3: Housing specifically prohibits cross-subsidy from market housing. However, the Coalition Government’s proposed new policy on rural exception schemes in the draft NPPF encourages local authorities to allow an element of market housing on sites in rural areas in order to meet broader housing needs and facilitate the delivery of affordable housing.

Also the new public funding regime and recent cuts in public expenditure limit the funding available to housing associations for these grant hungry schemes. Several housing associations and local authorities have already been exploring the cross-subsidy model and some of their experiences and the practical issues arising are set out in the discussion paper.

If you have any questions regarding cross-subsidy rural exception sites, please call 0117 9561916 or contact all@tetlow-king.co.uk.