Affordable housing tenure mix as schemes get larger

Affordable housing policy switches on at major development, which nationally means 10 or more dwellings or a site of 0.5 hectares or more, and in designated rural areas can be set lower by the local plan. Below that threshold the national position is that provision should not be sought, which is why so many schemes arrive at nine units. Above it, two separate questions open up: what percentage, and in what tenure mix. The percentage is the one developers argue about. The tenure mix is the one that decides whether the scheme is deliverable.

Check the current edition of the National Planning Policy Framework for the threshold and the rural exceptions, because the Framework was re-issued on 17 August 2026 with policy coded chapters in place of the paragraph numbering used before, and the affordable housing definitions sit in its glossary rather than in the main text.

How a plan expresses percentage and mix

An adopted local plan policy normally does three things at once. It sets a target percentage of the homes to be affordable, often varying by area or by site type. It sets a tenure split within that percentage. And it states whether provision is expected on site, with off site provision or a payment allowed only by exception.

The percentage is usually a single figure applied above the threshold rather than a sliding scale, which produces a cliff edge at 10 units that every small developer notices. Some plans add a second step at a larger figure, and a few in high value areas vary the percentage by value zone. Read the policy wording and the supporting text together, because the supporting text often carries the tenure definitions the policy relies on.

In London there is an additional layer. The London Plan 2021 operates a threshold approach, under which a scheme meeting a stated minimum percentage of affordable housing with the required tenure split can follow a faster route that avoids a detailed viability assessment, while a scheme below it goes through the viability route with review mechanisms attached. Policy H6 sets the tenure split, with low cost rent and intermediate products each taking a defined share and the balance determined by the borough.

Social rent against affordable rent

These are not interchangeable, and the difference matters more to the scheme's value and to the authority's housing team than almost anything else in the mix.

Social rent is set under the national rent regime at a formula rent, well below market level, and let by a registered provider with nomination rights to the authority. Affordable rent is capped at up to 80 per cent of local market rent including service charge, which in high value areas is a long way above social rent and in low value areas is barely below market. A policy expressed as "affordable rent" in a town where market rents are modest delivers very little subsidy, and housing officers know it.

Many authorities have shifted their asking position towards social rent on that basis. Where a plan says "affordable housing for rent" without specifying, expect the housing team to ask for social rent and expect the negotiation to be about the proportion rather than the principle. The financial difference flows straight into the appraisal, which is why the tenure question and the Viability Assessment have to be prepared together rather than sequentially. That document needs a suitably qualified author following the national viability guidance, and professional review is strongly advised.

Home ownership products and where First Homes sit

National policy has expected a share of the affordable homes on major sites to be available for affordable home ownership, with exemptions for build to rent schemes, specialist accommodation, self and custom build, and some exception sites. Shared ownership is the product most registered providers want, because the model is established and the retained equity is financeable.

First Homes were introduced as a specified kind of affordable housing by written ministerial statement in May 2021, sold at a discount of at least 30 per cent to market value with a price cap after discount and a restriction binding future sales. The requirement at the time was expressed as a minimum share of the affordable units secured through planning obligations. The national position on First Homes has been revisited since, so confirm the current requirement in both national policy and the adopted local plan before you fix a mix, rather than carrying forward the figure from an earlier scheme.

One practical point regardless of the product. Discounted market sale and First Homes both sit with a private owner subject to a restriction, which means the obligation has to deal with mortgagee protection, resale valuation and enforcement against a consumer. Lenders read those clauses closely, and a badly drafted restriction makes the units unmortgageable, which surfaces at the worst possible moment.

Clustering, tenure blindness and what a provider will manage

Design policy expects affordable homes to be indistinguishable from market homes externally, and housing management expects something close to the opposite: units grouped so that one provider can manage, service and charge for them efficiently.

The compromise that usually works on a flatted scheme is tenure blind externally, with affordable units grouped by core so that a provider owns whole vertical slices rather than scattered flats. On a housing scheme it is small clusters distributed across the site rather than a single block at the entrance. What does not work, and what a borough will refuse, is a separate secondary entrance for affordable residents or a visibly inferior specification on the affordable elevations.

Three things to settle early:

1. Service charges. A provider will not accept units in a core with a concierge, a lift lobby and a landscaped podium if the resulting charge exceeds what its residents can pay. That constraint shapes the massing, not just the schedule.
2. Wheelchair user dwellings. Where policy requires a proportion built to the higher accessibility standard, agree which tenure carries them, because an affordable wheelchair unit on an upper floor with a single lift is a management problem.
3. Unit sizes and mix. Providers want family sized homes and authorities usually ask for them. The interaction with space standards at larger scales is set out in space standards and unit mix at larger scales.

And talk to registered providers before submission, not after consent. A letter from a provider confirming interest in the schedule, the tenure and the indicative transfer value is worth more at committee than any amount of argument about policy compliance. It also tells you early if nobody will take the units, which is better news in March than in October.

Off site provision and commuted sums

National policy treats on site provision as the starting point, with off site provision or a financial contribution acceptable only where robustly justified and where the alternative delivers at least equivalent benefit. Authorities apply their own formula to commuted sums, usually derived from the difference between market value and the transfer value of the affordable units, and most publish it in a supplementary planning document.

Justifications that tend to succeed are site specific and evidenced: a scheme too small to interest any provider, a site where service charges would be unaffordable for a rented product, a conversion where the resulting units cannot meet a provider's standards. Justifications that fail are generic assertions about management difficulty.

If a commuted sum is agreed, pin down the indexation, the trigger for payment and what happens if the authority does not spend it within the period in the deed. Those three points cause more argument after completion than the amount does.

What the submission has to evidence

The Affordable Housing Statement is a short document that is almost always too vague. What an officer needs:

• A unit by unit schedule giving plot or flat number, bedrooms, bed spaces, floor area against the applicable space standard, tenure, and accessibility standard.
• A colour coded plan showing tenure by unit, with the cores or clusters identified.
• The percentage calculation, stated by unit and by habitable room or bed space if the policy uses those, because the two give different answers.
• The tenure split against the policy requirement, with any shortfall identified rather than averaged away.
• Correspondence with registered providers, or an explanation of why none has been approached.
• The position on review mechanisms, phasing and the cascade if a provider cannot be found.
• Where provision is below policy, a cross reference to the viability evidence rather than a bare assertion.

Set the mix against the policy line by line and show the arithmetic. A statement that concludes "the scheme is policy compliant" without a schedule is the quickest way to an officer's request for further information, and on a major application that request costs a committee cycle.

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. To see which documents a scheme of your scale is likely to need, enter your postcode on PlanScope.