Affordable housing on small sites and the national threshold
The small sites threshold has two limbs: ten dwellings and 1,000 square metres of gross internal floorspace. Designated rural areas can apply a lower figure, and vacant building credit can remove the contribution.
The affordable housing small sites threshold in national policy is ten dwellings, with a floorspace limb attached. Contributions towards affordable housing should not be sought from developments of ten dwellings or fewer where the combined gross internal floorspace is no more than 1,000 square metres. Both parts have to be satisfied, which is the bit people miss: four large detached houses can exceed 1,000 square metres and fall on the wrong side of a threshold that looks generous when counted in units.
In designated rural areas a lower threshold can apply, and in those places a contribution can be sought from schemes of five units or fewer as a commuted sum. So the first question on any small site is not how many houses fit, it is which threshold the land sits under.
The national position on contributions from small sites
The ten unit and 1,000 square metre position sits in the National Planning Policy Framework and is elaborated in the Planning Practice Guidance on planning obligations. The Framework has been reissued more than once, most recently on 17 August 2026 with policy-coded chapters in place of paragraph numbers, so cite the current edition and check the wording rather than quoting an old paragraph number.
The policy is a restraint on authorities, not a right held by developers. It says contributions should not be sought below the threshold, which leaves room for a plan-making authority to justify a different approach on evidence, and room for argument about whether a particular scheme sits below the line.
Gross internal floorspace is the measure for the second limb. Measure it properly, to the internal face of external walls including internal walls and circulation, rather than using a sales area figure, because a scheme close to the line will be checked.
Lower thresholds in designated rural areas
Designated rural areas are defined by reference to section 157 of the Housing Act 1985, and they take in National Parks, National Landscapes and areas designated by order. In those areas an authority may apply a lower threshold of five units or fewer, and where it does, contributions can be sought from smaller schemes.
Two practical points follow. The designation is geographic and published, so check whether the site falls inside it before buying rather than after. And the policy contemplates the contribution being taken as a commuted sum payable on or after completion, which is a cash flow question rather than a design question.
Rural sites therefore carry a different arithmetic from urban ones at the same unit count. A five unit scheme in a National Landscape can attract a contribution that the identical scheme in a town would not.
How local plans handle sites below the threshold
Adopted local plans vary more than the national position suggests. Some restate the national threshold. Some set out a sliding scale for larger schemes and say nothing about small ones. Some carry older policies adopted before the national threshold that seek contributions from smaller sites, and where those policies are out of date the national position generally prevails, though that is an argument to be made rather than a fact to be assumed.
Read three documents before committing. The adopted local plan policy on affordable housing, with its number, so you can quote it. Any supplementary planning document on obligations, which usually holds the formula. And the authority's published obligations or viability guidance, which sometimes reveals how it treats the floorspace limb.
Where a policy conflicts with the national threshold, raise it at pre-application rather than at determination. Officers are usually aware of the tension and would rather address it early than defend it at appeal.
Counting units across a subdivided site
The threshold invites subdivision, and authorities know it. Two applications of six units on adjoining parcels in the same ownership, brought forward together, will be assessed as one development of twelve if the facts support that reading.
The factors that decide it are practical rather than formal: whether the parcels were in the same ownership, whether the access and infrastructure are shared, whether the applications were submitted close together, whether the layouts only work as a pair, and whether there is any planning reason for the division other than the threshold. A genuine sequence of small sites brought forward years apart by different owners is a different matter from two halves of one field.
The same logic reaches phasing. A scheme granted as eight units with an obvious second phase on retained land will be looked at again when the second phase arrives.
Commuted sums instead of on site provision
Where a contribution is sought from a small site, the usual mechanism is money rather than units, because a single affordable home on a scheme of five is difficult for a registered provider to manage and hard to secure on acceptable terms.
The sum is normally calculated by a formula in the authority's supplementary planning document, secured by an agreement under section 106 of the Town and Country Planning Act 1990, and triggered on occupation or on a stated date. Three things to check in the draft agreement: the trigger, whether the sum is indexed, and whether there is a clawback or review mechanism.
Vacant building credit is worth knowing about here. Where a vacant building is brought back into use or demolished for redevelopment, national policy provides for a credit equivalent to the existing floorspace to be set against the affordable housing requirement. It is frequently overlooked on small brownfield sites and it can remove the contribution entirely.
Where the threshold interacts with viability
Above the threshold, the affordable housing requirement is a policy figure and the route to reducing it is a viability case. Plan-level assumptions apply unless you can show that circumstances justify departing from them, and the burden sits with the applicant.
On a small site that burden is heavy relative to the sums involved. A Viability Assessment on a ten unit scheme can cost more than the contribution it seeks to reduce, and the authority will appoint its own reviewer at your expense in many areas. The assumptions that get tested hardest are the land value benchmark and the developer return, as set out in the discussion of developer return assumptions in planning viability, and the cost side turns on how abnormals are evidenced, which is covered in abnormal costs in a planning viability appraisal.
So on small sites the sensible order is: establish the threshold, check for vacant building credit, and only then consider viability.
Checking the adopted policy before you buy
- Establish the unit count and the gross internal floorspace of the scheme you actually intend to build, not the one in the sales brochure.
- Check whether the site is in a designated rural area under section 157 of the Housing Act 1985.
- Find the adopted local plan policy number on affordable housing and read the threshold wording.
- Find the supplementary planning document with the contribution formula, and calculate the sum.
- Check whether any building on the site is vacant and whether vacant building credit is available.
- Ask the authority in writing, at pre-application, what contribution it would seek from the scheme as described.
An Affordable Housing Statement setting out the unit count, the floorspace, the threshold position and any credit claimed is the document that puts all of that in front of the case officer in one place. On a small site it is often two pages, and it prevents the requirement appearing for the first time in a draft agreement.
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This article is general guidance, not legal advice. National policy and local plan thresholds change, so check the current position with your local planning authority or a qualified professional before relying on it. PlanScope provides AI-assisted draft reports for planning applications. Reports should be reviewed before submission. We do not guarantee planning approval.
Frequently asked questions
What is the affordable housing threshold for small sites?
National policy says contributions should not be sought from developments of ten dwellings or fewer with a combined gross internal floorspace of no more than 1,000 square metres. Both limbs have to be satisfied, so a small number of large houses can exceed the floorspace figure and fall outside the protection the unit count suggests.
Is the threshold lower in rural areas?
It can be. In designated rural areas, defined by reference to section 157 of the Housing Act 1985 and including National Parks and National Landscapes, an authority may apply a threshold of five units or fewer. Where it does, contributions can be sought from smaller schemes, typically as a commuted sum payable on or after completion.
Can I split a site to stay below ten units?
Authorities assess whether parcels form one development on the facts. Shared ownership, shared access and infrastructure, applications submitted close together and layouts that only work as a pair all point towards a single scheme. A genuine sequence of small sites brought forward years apart by different owners is a different matter.
What is vacant building credit?
Where a vacant building is brought back into use or demolished for redevelopment, national policy provides for a credit equivalent to the existing floorspace to be set against the affordable housing requirement. It is often overlooked on small brownfield sites and can remove the contribution entirely, so check whether any building on the site qualifies.
Is a viability assessment worth it on a small site?
Frequently not. Plan-level assumptions apply unless you can show circumstances justify departing from them, the burden sits with the applicant, and many authorities appoint their own reviewer at your expense. On a ten unit scheme the assessment can cost more than the contribution it seeks to reduce, so establish the threshold position first.
Sources and further reading
This article is general guidance about the planning system in England and, where stated, the rest of the UK. It is not legal or professional advice. Check your local planning authority’s validation requirements and take professional advice for your specific site.