Persimmon Homes (North East) Ltd & Ors v Blyth Valley Borough Council

A development plan policy setting an affordable-housing target must be founded on a lawful and sufficiently informed assessment of economic viability. A target cannot be justified merely by housing-need evidence, local authority experience, or comparison with a neighbouring authority. The assessment may allow viability to be considered on individual applications, but that does not cure a legally flawed plan-wide target because the target remains the starting point under Planning and Compulsory Purchase Act 2004, section 38(6). Where material new guidance arises before examination, the Inspector may seek further evidence, adjourn the examination, require suitable modification, or recommend withdrawal. Policy H4 was therefore quashed, although affordable housing could still be required on individual developments pending reconsideration.

The claimants, three housing developers, challenged Policy H4 in the defendant Council’s Core Strategy under section 113 of the Planning and Compulsory Purchase Act 2004. The policy set a borough-wide target of at least 30 per cent affordable housing and applied a ten-dwelling threshold.

The Core Strategy had been submitted for examination before Planning Policy Statement 3 was published. The Inspector nevertheless recommended adoption with modifications, treating 30 per cent as a target to be adjusted on individual applications according to viability. The central issue was whether the policy was lawful and sound when the Council had not undertaken the informed economic-viability assessment required by PPS3.

1. Claim allowed. Policy H4, together with the relevant supporting text, was quashed under section 113. Costs were payable by the Council, subject to detailed assessment if not agreed. Permission to appeal was granted.
2. Under section 20 of the Planning and Compulsory Purchase Act 2004, an independent examination must consider whether a development plan document satisfies the statutory and regulatory requirements and whether it is sound. A challenge under section 113 may be directed to an individual policy, rather than requiring the whole plan to be quashed.
3. The relevant guidance required an overall affordable-housing target to reflect both housing need and the likely economic viability of land, including the level of developer contribution reasonably capable of being secured. Policy H4 was based principally on need, experience and comparison with a neighbouring authority. No detailed evidence established the viability of the 30 per cent figure.
4. The Inspector was entitled to treat 30 per cent as a target rather than an inflexible requirement and to recognise that individual applications might justify a lower percentage. That flexibility did not cure the defect. The target remained the starting point for decisions under section 38(6), and therefore had to be lawfully established.
5. The emergence of relevant guidance after submission did not create an absolute freeze. An Inspector could obtain further material, keep the examination open, adjourn it, require a lawful modification, or recommend withdrawal where new matters materially affected the policy.
6. The absence of Policy H4 did not mean that developments could proceed without affordable housing. Pending a fresh policy, the Council could seek such provision to the extent justified by the circumstances of each individual development.

This was a first-instance claim in the Administrative Court. The judgment records that permission to appeal was granted because the effect of the statutory presumption of soundness under section 113 raised a potentially important issue.