Parkhurst Road Ltd v Secretary of State for Communities And Local Government & Anor

In assessing viability and affordable housing, a benchmark land value must satisfy all three requirements in paragraph 023 of the National Planning Practice Guidance: it must reflect planning policies and obligations, provide a competitive return to a willing landowner and developer, and be informed by genuinely comparable market evidence where possible.

Market transactions cannot establish a reliable norm merely by being averaged. Unknown assumptions about development capacity, affordable housing, existing or alternative use value, and abnormal costs may require adjustment or substantially reduce the weight given to the evidence. Where policy places responsibility on an applicant to demonstrate that a lower level of affordable housing is the maximum reasonable amount, the applicant bears the corresponding evidential burden.

Parkhurst Road Ltd challenged an Inspector’s dismissal of its planning appeal concerning redevelopment of a former Territorial Army Centre in Islington. The proposed residential scheme comprised 96 units, including 10% affordable housing. The Council contended that 34% was the maximum reasonable provision.

The challenge concerned the Inspector’s assessment of benchmark land value, the treatment of comparable transactions and the adequacy of his reasons. The claimant alleged errors in the treatment of an EUV-plus approach, a comparative valuation method and particular market evidence. A further challenge concerned the adequacy of a section 106 viability review mechanism.

1. The claim was dismissed. Permission for statutory review was granted on grounds 1 and 2, but the substantive challenge failed. Ground 3 was unarguable.
2. Paragraph 023 of the National Planning Practice Guidance requires benchmark land value to reflect planning requirements and obligations, provide a competitive return to willing developers and landowners, and be informed by comparable market evidence wherever possible. Comparable evidence must itself reflect planning policy, or be adjusted to do so. Its reliability is a matter of judgment for the decision-maker.
3. The London Plan, the Islington Core Strategy and the Development Viability SPD placed responsibility on the applicant to demonstrate that a proposal below the borough-wide 50% affordable housing target nevertheless provided the maximum reasonable amount. This created an evidential burden, although not a legal burden of proof, as explained in Vicarage Gate Ltd v First Secretary of State and Harris v First Secretary of State.
4. The Inspector was entitled to prefer an EUV-plus approach, used as a market-informed assessment rather than a rigid formula. He was also entitled to give limited weight to market evidence where the assumptions underlying bids and transactions were unknown or where necessary adjustments had not been made. The concepts of a willing seller and open market were explained by reference to Trocette Property Co Ltd v Greater London Council and Inland Revenue Commissioners v Gray.
5. The Inspector’s acceptance of the Council’s comparative method contained flawed reasoning. Dividing land price by an assumed number of market units did not correct distortions in the price itself arising from different development capacities, existing or alternative use values, constraints or planning costs. Nevertheless, the error was immaterial. Unchallenged reasoning independently rejected the claimant’s valuation evidence, and the Inspector would inevitably have reached the same conclusion. The separate inadequacy of the section 106 review mechanism also independently supported dismissal.
6. A planning decision-maker need not address every argument or item of evidence. A reasons challenge requires substantial doubt about legal error and substantial prejudice, applying South Bucks DC v Porter (No 2). The Inspector’s reasons sufficiently explained why the proposed affordable housing provision was inadequate.