Guidance on vacant building credit updated

We recently reported on the introduction of the vacant building credit (VBC) to incentivise brownfield development on sites containing vacant buildings.

Communities Secretary Eric Pickles has since announced changes to the guidance on VBC following concerns raised by several Councils about its effect. The Councils in question criticised the scheme on the basis that they were set to lose millions of pounds by losing affordable housing contributions with a further impact likely on the number of affordable homes being built. Westminster Council had argued that it could in fact lose £1bn in housing payments. Perhaps the most controversial element of the VBC scheme was that in the process of incentivising development, it appeared to adversely encourage developers to exploit the policy by, for example, evicting tenants to make them “vacant”.

The guidance now explains that local planning authorities should have regard to the intention of the national policy when considering how the VBC should apply to a particular development. Crucially the guidance says that, in doing so, it may be appropriate for authorities to consider:

  • Whether the building has been made vacant for the sole purpose of redevelopment, and;
  • Whether the building is covered by an extant or recently expired planning permission for the same or substantially the same development.

These changes go some way to alleviating concerns local authorities had when VBC was first introduced. The amendments provide some flexibility and discretion for the local authorities in the way in which they consider whether the VBC should be applied, to encourage genuinely vacant, brownfield sites into use – which is what the VBC was intended to do when it was first introduced.

Some uncertainty remains, however. For example, no time limit is specified for the period of time that has to elapse before the building is considered “vacant”. Some local authorities are also considering whether to amend development plans to establish a local exemption policy against the credit.

For more information on this article or other Property matters, please contact a member of the Property Team.


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