Viability study challenges ‘affordable’ housing requirement

Reason Homes plan new estate at Doddington

View east to Sutton Way showing site of proposed new estate at Doddington for Reason Homes. - Credit: FDC Planning Portal

Developers hoping to build 16 homes at Doddington says poor ground conditions and the need for piled foundations, makes it unviable to provide any affordable homes on site.  

A 47-page report prepared for Reason Homes by Maxey Grounds says piling will cost an extra £5,000 per home and £1,500 for each garage.  

And they say Reason Homes have other “abnormal costs” which had been identified as part of their previous experience in building 28 homes nearby.  

Reason wants to build 16 homes north of 43-53 High Street.

Maxey Grounds has presented its report to Fenland District Council which is considering the application, which has already attracted scores of protests from residents.  

The report says all financial models show a financial deficit once construction and other costs have been taken into account.  

“Our conclusion is that with policy level affordable housing and S106 contributions, the development is not viable unless the developer is willing to accept a profit level of below 17.5 per cent,” says Maxey Grounds.  

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“Our calculation is that the maximum total contribution covering all S106 requirements the scheme can provide is £86,000.” 

Maxey Grounds says that sum will help the site achieve “marginal viability”.  

It refers to a council draft local plan viability report which suggests that a site with no abnormal costs would provide 20 per cent affordable housing and £2,000 S106 payments for each unit.  

“This assessment has been formally challenged on consultation,” says Maxey Grounds.  

Evidence has been submitted that the council’s draft report “over assesses market values and under assesses development cost (e.g., not modelling for garages).  

“The council has determined for development control purposes they will reduce the initial requests for S106 requirements to no more than the current draft proposals suggests can be achieved but will continue to be prepared to assess sites on an individual basis.” 

Maxey Grounds says that if a “fully policy-compliant" scheme for 16 homes with a contribution of £180,000 in lieu of affordable housing and £2,000 per unit S106 payments it would show a financial deficit of around £113,869.  

That allows for current market costs and the £280,000 site value.