According to a report from London First, called The Off-Site Rule, property developers are increasingly making cash payments to councils to avoid having to satisfy planning requirements for affordable housing in their developments.
Developers paid councils more than £250m in 2014, the report says. The London Plan adopted under mayor Boris Johnson makes clear this practice is quite legal “where this would have demonstrable benefits in furthering the affordable housing and other policies”.
London First blames the councils, not the developers. It has no problem with developers using their money in this way but is concerned with what happens to the money next. It says that the money should be ring-fenced for delivering affordable housing by councils themselves and not just go into the general expenditure pot.
“There needs to be a pan-London system for making this work – it’s a wasted opportunity that some of this money isn’t being fully utilised,” Jonathan Seager, director of housing policy at London First, told the Financial Times.
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