Breakthrough for affordable housing across UK as RICS set to amend guidance following Islington High Court case

PUBLISHED: 09:33 12 October 2018

RICS will consider the High Court judge's comments when reviewing its guidance. Picture: PA

RICS will consider the High Court judge's comments when reviewing its guidance. Picture: PA


More affordable housing could be built across the country thanks to a “game-changing” High Court victory for Islington Council, with the judge’s comments set to influence new guidance for surveyors.

The Royal Institute of Chartered Surveyors (RICS) has said it will address Mr Justice Holgate’s recommendations that its nationally-used guidance on viability assessments is revised to stop more cases going before the courts.

RICS’ announcement is a response to an open letter sent this week by Islington’s housing chief Cllr Diarmaid Ward and City Hall’s deputy mayor for housing James Murray – who used to have Cllr Ward’s job.

The pair urged RICS to make its guidance more in tune with the council’s so developers can no longer “manipulate” viability assessments to wriggle out of building affordable homes.

Viability assessments determine the cost of a project for developers, and are often used to argue they cannot meet a council’s required number of affordable homes. In Islington, that’s half of any major project.

They will say they have overpaid for the land – coughing up what it could potentially be worth – and therefore can’t afford to build much-needed social homes.

Islington changed its own guidance in 2016 to stop this happening by refusing to recognise anything but the genuine value of a site during the planning process. But by then the land has already been bought based on valuations from a surveyor, who will have used RICS’ guidance.

Islington can still reject an application, but then a lengthy appeal process usually ensues that slows down the arrival of the new homes and could see their decision overturned by the Planning Inspectorate anyway.

But that could all be set to change.

Tony Mulhall, RICS associate director, told the Gazette the guidance was being reviewed to align with the government’s new planning framework, and the judge’s comments would be considered.

He said: “This review process has established input from both public and private sector expertise, and the working group looking at our technical guidance in this area comprises representation from Ministry of Housing, Communities and Local Government (MCHLG), the Royal Town Planning Institute, and the Law Society as well as the Greater London Authority.

“In the second stage of this review, RICS is addressing the recent comments published by Mr Justice Holgate including his desire for our guidance to play a central role in this area.

“This will provide greater clarity on the methodology to be adopted by the profession in undertaking viability assessments, within the parameters of the government’s current policy.”

Mr Mulhall, who said RICS was “acutely aware” of the challenge of building homes across London, said he expected a draft of the new guidance to be published before the end of the year.

The High Court dispute centred around an old Territorial Army base in Parkhurst Road. Parkhurst Road Ltd wanted to build 96 homes on the site but offered no affordable housing at all. One of the reasons the firm gave was the price it had paid for the land.

The application was rejected by Islington Council twice and then by the Planning Inspectorate before reaching the High Court.

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