Affordable housing tenure mix as scheme size changes
The tenure split comes from the local plan, not national policy. What shifts with scheme size is whether a provider will take the units and how they can be managed.
Affordable tenure mix by scheme size is decided by the local plan, not by national policy, and that is the first thing to establish on any site. National policy sets the threshold at which affordable housing is required at all, and expects a proportion of the affordable homes on major development to be available for affordable home ownership. Everything else, meaning the split between social rent, affordable rent and the intermediate products, comes from the adopted plan and from whatever supplementary guidance sits beneath it.
What changes with scheme size is not usually the policy percentage. It is whether anyone will take the units, how they can be managed, and whether the mix the policy asks for can actually be delivered in the building form the site supports.
Where the tenure split is actually set
Read three documents in order. The adopted local plan policy on affordable housing, which gives the percentage and normally the tenure split. Any affordable housing supplementary planning document, which usually carries the detail on unit types, clustering, space standards and transfer values. And the authority's most recent section 106 precedent or heads of terms template, which tells you what they will actually sign.
In London the position is layered. The London Plan 2021 sets a threshold approach in Policy H5 and a tenure split in Policy H6, which requires a minimum proportion of low cost rented homes, a minimum proportion of intermediate homes, and leaves the remainder to the borough. Borough plans then apply their own preference within that remainder. So a scheme in London has two policy layers to satisfy rather than one.
National policy defines the products. The Framework's glossary sets out social rent, affordable rent and affordable home ownership, the last covering shared ownership, discounted market sale and rent to buy alongside First Homes. First Homes were introduced by written ministerial statement in 2021 with an expectation about the proportion of affordable housing delivered through planning obligations. Check the current position and how the authority applies it locally rather than assuming, because this is one of the areas that has moved most since 2021.
What changes at 10, 50 and 150 units
| Scheme size | What changes for affordable housing |
|---|---|
| Below 10 units, or under 0.5 ha | Generally outside the affordable housing requirement, except in designated rural areas where a lower threshold may apply |
| 10 units and above | Major development, so the plan's affordable percentage and tenure split apply, and an Affordable Housing Statement becomes a validation requirement in most authorities |
| Roughly 10 to 30 units | The hardest band for registered provider interest, because management costs per unit are high and the units are usually flats within a private block |
| 50 units and above | Enough units for a viable transfer package, clustering becomes possible, and phased delivery triggers start to appear in the obligation |
| 150 units and above | Phased obligations, cascade mechanisms and review mechanisms become normal, and in London the scheme is referable to the Mayor |
The threshold at 10 units is the one that shapes small site strategy, and the pressure it creates is visible in the number of nine-unit schemes that come forward. Authorities know this, and a plan policy that applies the requirement to schemes below the national threshold in designated rural areas is increasingly common. Our note on housing mix and space standards as schemes grow covers the parallel changes to unit types.
Registered provider appetite at small scale
This is the practical constraint that policy documents do not acknowledge. A registered provider takes on a long-term management liability, and below a certain number of units in one place, that liability costs more to service than the rent recovers.
What providers tend to look for is a cluster rather than pepper-potted units, a separate entrance or at least a separate core, no reliance on a private management company for anything they are responsible for, a service charge they can predict and defend to a tenant, space standards met with some margin, and accessible units where the plan requires them. A handful of shared ownership flats scattered through a private block with a service charge set by the freeholder is close to unsellable to a provider.
Two things have tightened this further. Building safety remediation obligations have made providers cautious about taking flats in blocks where the external wall position is not settled. And rising management and maintenance costs have raised the minimum viable cluster size on many providers' internal criteria.
So test the market early. A letter of interest from a provider, or a clear statement that no provider would take the package and why, carries more weight with an officer than an assertion about viability.
Management and service charge in mixed blocks
Mixed tenure blocks work when the management arrangements are designed rather than inherited. Where a private freeholder sets the service charge and a provider owns flats within the block, the provider is exposed to costs it cannot control, and its tenants are exposed to charges they cannot pay.
Design responses that help include separating cores so that rented and private homes have their own common parts, keeping shared plant to a minimum or metering it, avoiding shared lifts and concierge arrangements where the rented homes cannot support the cost, and setting out a clear division of responsibility in the obligation.
Tenure blind design matters to officers, and it should. But tenure blind does not mean tenure identical in cost, and a scheme that achieves visual parity by giving rented homes a share of an expensive lobby has solved the planning problem and created a management one.
Commuted sums and off-site provision
National policy expects affordable housing to be provided on site, with off-site provision or a financial contribution acceptable only where that can be well justified and where the agreed approach contributes to the objective of creating mixed and balanced communities.
The justification that tends to succeed is specific. The site cannot accommodate a viable cluster because it produces four flats in a single core. No provider will take the package, evidenced by correspondence. An identified alternative site or programme will deliver more affordable homes for the same money. What does not succeed is a general submission that a commuted sum would be simpler.
Where a sum is agreed, check how it is calculated and indexed. A contribution fixed in cash terms and paid on occupation three years later has lost value, and authorities increasingly index to a construction cost or house price measure with a stated base date.
Testing the mix against viability
Planning Practice Guidance on viability is clear that the price paid for land is not a justification for failing to meet policy, and that where a scheme complies with plan policy, a viability assessment should not be needed. So a viability case that arrives with a policy-deficient mix has to explain why the site is exceptional.
A Viability Assessment that tests the tenure mix specifically, rather than only the overall percentage, is more useful than one that tests the headline figure. The difference between social rent and shared ownership transfer values on the same units can move a residual land value materially, and an authority weighing a reduced social rent proportion against a higher overall percentage needs to see both options modelled.
Be ready for a review mechanism. On larger and phased schemes, early and late stage review clauses are now standard in many authorities, and the drafting matters more than the principle. Read the trigger, the inputs, the cap and who appoints the reviewer.
Agreeing the mix before you submit
Settle the tenure mix at pre-application, in writing, with the housing team as well as the planning officer present. The housing enabling officer is the person who knows which providers are active in the area and what they will accept, and their view will shape the officer report.
- Confirm the plan policy percentage and split, and whether any supplementary guidance alters it.
- Establish the authority's current preference within any discretionary element of the split.
- Approach two or three providers with a unit schedule and a draft service charge position.
- Fix the clustering and core strategy in the layout before the planning drawings are finalised.
- Prepare the Affordable Housing Statement setting out the mix, the tenures, the unit schedule, the provider position and the delivery mechanism.
- Agree heads of terms for the obligation in parallel with the application rather than after committee resolution.
For schemes in London, the referral position adds a further reviewer with its own tenure expectations, as set out in our note on mayoral referral thresholds. Where the scheme is large enough for phased delivery, make sure the obligation ties affordable delivery to occupation of private homes rather than to a date, so that a slower market does not leave the affordable element unbuilt.
This is general guidance, not legal advice; check the 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.
Enter your postcode on PlanScope to see which reports a scheme at your unit count is likely to need.
Frequently asked questions
Who sets the affordable housing tenure split?
The adopted local plan, with detail usually in an affordable housing supplementary planning document. National policy sets the threshold at which affordable housing is required and expects a proportion to be available for affordable home ownership. In London the London Plan adds a further layer through its threshold approach and tenure split policies, which the borough plan then applies.
Why do registered providers turn down small schemes?
Because long-term management costs per unit are high and a small, pepper-potted package cannot support them. Providers generally want a cluster, a separate core or entrance, a predictable service charge they do not depend on a private freeholder to set, space standards met with margin, and certainty about external wall and building safety obligations.
When is a commuted sum acceptable instead of on-site provision?
Where off-site provision or a contribution is well justified and the agreed approach contributes to mixed and balanced communities. Specific justifications work: the site produces only a few flats in one core, no provider will take the package and the correspondence proves it, or an identified alternative will deliver more homes for the same money.
Does a policy-compliant scheme need a viability assessment?
Generally no. Planning Practice Guidance on viability says a viability assessment should not be needed where a scheme complies with up-to-date plan policies, and that the price paid for land does not justify failing to meet policy. A viability case arriving with a deficient mix has to explain why the site is exceptional.
What should the affordable housing statement contain?
The proposed percentage and tenure split against the plan policy, a unit schedule showing size, type and tenure for every affordable home, the clustering and core arrangement, the service charge position, evidence of registered provider interest, the delivery mechanism and trigger, and the proposed heads of terms for the planning obligation.
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.