Nearly 80% of affordable homes are lost due to a legal loophole exploited by developers, housing charity reveals.
Research by Shelter has found that 2,500 affordable homes (79%) were lost from the number required by council policies because of ‘viability assessments’.
Viability assessments allow developers to reduce the number of affordable houses they build if they can demonstrate building them risks reducing their profits to below 20%.
The charity argues the use of these assessments means many developers face no penalty for over-paying for land because they can recover the costs by building fewer affordable homes.
Shelter’s research was based on freedom of information requests sent to 11 local authorities across nine cities in England.
The worst affected areas were Manchester, Birmingham and parts of London where viability was used to reduce the affordable housing to less than 1% of homes built.
‘What this research reveals is the scale at which developers are able to use legal loopholes to protect their profits and dramatically reduce the numbers of affordable homes available for people,’ said Shelter chief executive, Polly Neate.
‘The Government needs to fix our broken housing system — and it must start by closing this loophole to get the country building homes that are genuinely affordable for people on middle and low incomes to rent or buy.’
