The vacant building credit and why councils resist it

The vacant building credit reduces an affordable housing contribution by reference to the floorspace of a vacant building already standing on the site. National policy in the Planning Practice Guidance on planning obligations says the developer should be offered a credit equivalent to the existing gross floorspace of relevant vacant buildings, set against the affordable housing requirement on the new scheme. It does not apply where the building has been abandoned. That single carve-out is where nearly every argument about the credit ends up.

Councils resist it for a reason worth stating plainly: on a brownfield site with a large redundant building, the credit can remove most of the affordable housing from a scheme, and authorities under pressure on housing delivery treat that as a loss they have to justify.

What the credit does to a requirement

The credit works on floorspace, not on units. Where a vacant building is re-used or demolished and redeveloped, the affordable housing contribution is calculated by discounting the existing gross floorspace from the proposed gross floorspace, so the requirement bites only on the uplift.

An illustrative case makes the arithmetic clear. A site holds a vacant 1,000 m² building. The proposal is 2,500 m² of residential floorspace, and the local plan requires 30 per cent affordable housing. With the credit applied, the requirement is assessed against 1,500 m² rather than 2,500 m², which in this illustration takes the effective provision to 18 per cent of the scheme. The figures are illustrative and the method has to be checked against the wording in the adopted plan.

Two points follow. The credit is normally taken as a proportion rather than a fixed number of units, so the affordable schedule has to be reworked rather than simply reduced. And where a scheme is already marginal, the interaction between the credit and a Viability Assessment needs care, because arguing both at once invites the authority to conclude that one of the two is doing no work.

The vacancy test and how long it must have lasted

National policy sets no minimum vacancy period. That silence is deliberate, and it is also the source of most of the disagreement.

Authorities fill the gap in their own plans and supplementary guidance, and the periods they adopt vary. Some require a continuous vacancy of a stated number of months immediately before the application. Others require evidence of genuine marketing at a realistic rent or price over a stated period. A few decline to apply the credit at all except where the building has been vacant long enough to be beyond reasonable re-letting.

Whatever the local wording, the evidence has to show the building was vacant at the point the application was made, and that the vacancy was not created for the purpose of the scheme. Partial vacancy is treated proportionately in most cases, with the credit applied to the unoccupied floorspace only.

Vacant or abandoned

The Guidance excludes abandoned buildings, and abandonment has a settled legal meaning that has nothing to do with whether a building looks neglected.

Four factors are weighed together, drawn from long-standing case law on the abandonment of a lawful use: the physical condition of the building, the length of the period of non-use, whether any other use has intervened, and the owner's intentions as evidenced by their conduct. None of them is decisive on its own. A sound building empty for three years with a marketing agent instructed throughout is unlikely to be abandoned. A roofless shell empty for 15 years with no rates paid and no attempt to let it almost certainly is.

Officers reach for abandonment because it disposes of the credit without needing a policy of their own. The answer is to meet it with evidence rather than assertion, factor by factor, in the planning statement.

Deliberate vacancy and how the authority responds

The Guidance expects authorities to consider whether a building has been made vacant for the sole purpose of redevelopment, and an authority that concludes it has will refuse the credit.

This is the argument that gets personal. A developer who buys an occupied building, serves notice on the tenants and applies for residential conversion three months later should expect the point to be taken and should have an answer ready. Ordinary commercial events are defensible: a tenant's lease expired and was not renewed, the occupier relocated, the business failed. Serving notice to create the vacancy is not.

Where the vacancy arose before the applicant's involvement, say so and evidence it with the acquisition date. Where the applicant did cause the vacancy, the credit is probably lost and the scheme should be tested without it rather than built around a policy position that will not survive committee.

Evidence of the previous lawful use

Two evidential questions sit underneath the credit: was the building lawfully in a use at all, and how much floorspace did that use occupy.

Assemble the record before drafting, because retrieving it later takes weeks:

• Business rates records showing the rateable occupier, the assessment and the date the property went into the empty rating list.
• Utility accounts and consumption records across the vacancy period.
• Lease documents, licence agreements and any notices served.
• Marketing particulars, agent correspondence and a schedule of enquiries received.
• Dated photographs, internal and external, showing condition through the period.
• A measured floor area survey to a stated standard, with the basis of measurement identified.

Where the lawful use itself is contested, a certificate of lawfulness for the existing use puts it beyond argument, though it adds time. The Affordable Housing Statement is the natural home for all of this, and it should set out the credit claim, the evidence and the resulting schedule in one place rather than scattering it across the submission.

Calculating the credit across a mixed scheme

Complications arrive when the existing and proposed uses are different, when only part of a building is vacant, or when a scheme is phased.

Measure on a consistent basis. Gross internal area on both sides is the usual approach, with the basis of measurement stated, because comparing a gross external figure for the existing building against a gross internal figure for the proposal inflates the credit and gets noticed.

For phased schemes, agree at the outset whether the credit is applied to the first phase, spread across phases, or held against the final one. Leaving it to the section 106 drafting produces a review mechanism nobody understands three years later. And where a scheme carries abnormal costs as well as a credit claim, keep the two separate in the narrative, since abnormal costs in a viability appraisal are tested against a different set of assumptions from the ones governing the credit.

Arguing the point where local policy is silent

Section 38(6) of the Planning and Compulsory Purchase Act 2004 requires decisions to be taken in accordance with the development plan unless material considerations indicate otherwise. Where the adopted plan says nothing about the credit, the national guidance is a material consideration of real weight, and the Court of Appeal has upheld the policy against challenge.

Where the adopted plan restricts or disapplies the credit, the position is harder. A recently adopted, examined policy that addresses the credit directly is likely to prevail, and the argument becomes one about the weight to attach to national guidance against a plan policy adopted with knowledge of it.

Structure the case in that order: identify the plan policy, state whether it addresses the credit, apply the national guidance, then deal with abandonment and deliberate vacancy on the evidence. Put the resulting affordable schedule in the same table as the policy-compliant one so the difference is visible. Officers who can see the number they are being asked to accept tend to engage with it, and the ones who cannot tend to default to the policy figure. The same discipline applies to developer return assumptions, where showing the working is worth more than asserting the conclusion.

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 brownfield redevelopment is likely to need, enter your postcode on PlanScope.