Rural exception sites and the local connection test

A rural exception site is land that would not normally be released for housing, granted permission anyway because it will deliver affordable homes for people with a connection to that specific place, held that way in perpetuity. The local connection test is what makes the exception defensible. Get the criteria wrong, or evidence them thinly, and the scheme reads as ordinary countryside housing with an affordable label attached, which is how these applications fail.

What a rural exception site is for

National policy describes rural exception sites as small sites used for affordable housing in perpetuity where sites would not normally be used for housing, meeting the needs of the local community by accommodating households who are current residents or who have an existing family or employment connection. A proportion of market homes may be allowed at the authority's discretion, for example where it is essential to deliver the affordable units without grant funding.

Every phrase in that definition is doing work. Small. Affordable. In perpetuity. Would not normally be used for housing. An existing connection. Market homes only where essential and only at the authority's discretion.

The consequence is that the site's unsuitability for ordinary housing is not a problem to be argued away. It is the premise. What you have to establish instead is that the local need is real, that it cannot be met within the settlement boundary or on allocated land, and that the homes will still be serving that need in forty years.

Do not confuse this with a First Homes exception site, which is a different mechanism with different rules and which cannot be used in designated rural areas.

Where the policy applies, and what a designated rural area changes

The exception site route is available in rural areas generally, subject to local plan policy, and the plan will usually define which settlements qualify and how close to them a site has to be. Read that policy first, because a site 400 metres down a lane from a village with no footway may fail the plan's own locational test whatever the housing need is.

Designated rural areas add a separate layer. These are areas designated under section 157 of the Housing Act 1985, and they include National Parks and National Landscapes along with areas designated by order. Two things change in them. Authorities may set an affordable housing threshold of five units or fewer, rather than the general position that affordable housing is not sought below ten units. And the right to acquire and right to buy operate differently, which matters to the registered provider's business plan and therefore to what it will pay.

Check whether your site is in a designated rural area before designing the scheme. It changes the threshold, the tenure options and the perpetuity drafting.

The local connection criteria and how they are evidenced

Criteria vary between authorities, and the shape is consistent. A cascade, tightest first, with a defined qualifying period for each limb:

• Current residence in the parish for a continuous period immediately before allocation
• Former residence in the parish for a defined period
• Permanent employment in the parish, or a job offer
• A close family connection, usually a parent, adult child or sibling resident in the parish for a defined period
• A need to give or receive care or support to someone resident in the parish
• Former armed forces personnel, where the authority's allocations policy provides for them

Then a geographic cascade. If no qualifying household comes forward from the parish within a stated period, the pool widens to adjoining parishes, then to the district or borough, then to the wider housing market area. Each tier needs a period attached, and each period needs to be short enough that homes are not standing empty and long enough that the local purpose is meaningful.

Evidence comes from three places. A parish housing needs survey, usually carried out with the parish council and often with a rural housing enabler, which identifies households in need and their connection. The authority's own housing register, filtered for applicants with a connection to that parish. And the strategic housing market assessment or local housing need figure for context.

Authorities expect the parish survey to be recent, and each one has its own view of how recent, so ask before you commission it. A survey four years old, describing a need that has since been met by another scheme two villages away, is worse than no survey.

Tenure, mix and the registered provider

Bring a registered provider in early, before the layout is fixed. The provider will have views on unit sizes, on car parking, on the boundary treatment it has to maintain for thirty years, and on the service charge it can support. Those views cost far less to act on at sketch stage.

And match the mix to the survey rather than to what builds efficiently. Rural needs surveys usually show demand concentrated in one and two bedroom homes plus a small number of larger family houses, and a scheme of uniform three bedroom houses will be challenged on that ground alone. Tenure normally combines social or affordable rent with an intermediate product, in proportions the survey supports.

Set the whole case out in an Affordable Housing Statement that names the provider, sets out the mix against the evidenced need line by line, and explains the tenure split.

Cross-subsidy market housing and its limits

Market housing on an exception site is permitted at the authority's discretion where it is essential to deliver the affordable units without grant. That is a narrow gate, and it is tested with an open-book appraisal.

The appraisal has to show the minimum number of market units required, not a comfortable number. Expect the authority's consultant to test the land value assumption hardest, because on a site that would not otherwise be released for housing, the benchmark land value is close to existing use value rather than to residential value. An applicant claiming a residential land value on a site whose whole justification is that it would not normally be used for housing is making the case against itself.

Submit a Viability Assessment prepared on that basis, and expect it to be published. Then tie the market units to delivery through the obligation, so that the affordable homes are built and transferred before or alongside the market ones rather than afterwards.

Drafting the obligation to hold in perpetuity

The section 106 agreement is the scheme. It needs the eligibility criteria set out in full, with the qualifying periods and the cascade tiers and their time limits. It needs a definition of affordable housing that will still make sense when the current policy wording has been replaced. It needs the tenure of each plot fixed by reference to a plan.

It also needs the protective clauses that keep the units in the intended use. A restriction on disposal at open market value. Provision addressing the right to acquire and any staircasing on an intermediate product. A mortgagee exclusion clause, without which no lender will fund the provider. And a mechanism for what happens if no qualifying household exists at any tier, which should not be a clause requiring the parties to agree something later.

The evidence pack

Beyond the housing case, a village-edge greenfield site brings the ordinary rural evidence base:

1. A planning statement setting the proposal against the exception site policy, the settlement hierarchy and the local connection policy
2. The parish housing needs survey and the housing register analysis
3. A landscape and visual appraisal, because these sites sit outside settlement boundaries by definition
4. An agricultural land classification survey where best and most versatile land may be affected, which a soil survey to the published classification guidelines provides
5. A Foul Sewage Assessment, since village treatment works capacity is frequently the constraint that decides timing
6. Ecology, biodiversity net gain, drainage and highways in the usual way

Watch the boundaries during site preparation. Village-edge fields are defined by hedgerows, and removing one may require a hedgerow removal notice and can be refused, so read the position on the important hedgerow test before you plan an access.

This is general guidance, not legal advice. Local connection criteria and exception site policies are set locally and change, so 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 rural housing site is likely to need.