South East: Court ruling is bad news for small residential developers, says Coffin Mew

The courts have delivered a blow to small residential developers, potentially making schemes of up to 10 homes economically unviable.  The decision will particularly affect urban residential development and small rural sites, says law firm Coffin Mew.

The decision, delivered on July 31, relates to the exemption small residential developers have previously had from contributions towards affordable housing.  The exemption was introduced by the Government to encourage residential developers to bring forward smaller housing schemes and to redevelop compact urban and rural spaces to help meet the chronic housing shortage.

Two local authorities – Reading and West Berkshire – successfully challenged this exemption, arguing that it would have a negative effect on affordable housing numbers.

Nick Leavey, partner and head of commercial property at law firm Coffin Mew, which has offices in Portsmouth, Southampton and Brighton, and acts for residential developers across the South East, said: “This decision is a major blow for smaller residential developers looking to bring forward schemes in urban environments.

“The economic viability of small schemes is often on a knife-edge, and this decision is likely to pull the rug from underneath those difficult-to-develop sites.  It is also likely to have a negative effect on land values for future deals, further exacerbating the housing crisis in the South East. Nobody wins from this decision.”