Vacant building credit: when it applies and how to prove it

The vacant building credit reduces an affordable housing requirement by the floorspace of the vacant buildings being reused or replaced. National policy says a developer bringing a vacant building back into use, or demolishing it for redevelopment, should be offered a credit equivalent to the existing gross floorspace of the relevant vacant buildings. The affordable housing contribution is then calculated on the net additional floorspace rather than on the whole scheme.

On a brownfield site where the existing building is large and the new one is only modestly larger, that arithmetic can reduce a contribution to very little. Which is exactly why councils scrutinise the vacancy evidence closely.

What the credit does to an affordable housing requirement

The mechanism is subtraction, not exemption. Take the gross floorspace of the relevant vacant buildings, deduct it from the gross floorspace of the proposed development, and apply the affordable housing policy to the remainder.

An illustrative worked example. A vacant office building of 2,000 m², replaced by a residential scheme of 3,000 m² in an authority requiring 35 per cent affordable housing. The credit is 2,000 m², the net additional floorspace is 1,000 m², and the affordable requirement is applied to that 1,000 m² rather than to 3,000 m². The reduction is substantial. Illustrative only, and the policy percentage, the measurement basis and any local variation all need to come from the adopted plan.

The credit deals with affordable housing contributions. It does not touch the Community Infrastructure Levy, which has its own and quite different existing floorspace deduction, discussed below.

The national policy wording and its conditions

The credit originated in a written ministerial statement and now sits in national planning practice guidance on planning obligations. Its survival was tested in litigation, with the Court of Appeal upholding the policy in the West Berkshire case, and it has been carried through subsequent editions of national policy with amendments.

Two conditions are express. The building must be vacant, and the credit does not apply to buildings that have been abandoned. A third condition has been applied consistently in decisions: the credit is not intended for buildings made vacant for the sole purpose of redevelopment.

The guidance has been revised more than once and the position has moved with editions of the Framework. Check the current wording on gov.uk at the point you rely on it, and check the adopted local plan, because some authorities have plan policies that restrict the credit's application locally and those policies carry weight in the decision.

What counts as vacant and what counts as abandoned

Vacancy is a question of fact. National policy sets no minimum period, and local policies imposing one have been argued both ways at appeal, so establish what the adopted plan for the area says before assuming a twelve month test applies.

Abandonment is a different and more demanding question, and the courts approach it through four factors: the physical condition of the building, the length of the period of non-use, whether there has been any intervening use, and evidence of the owner's intention. No single factor decides it.

The practical distinction is between a building that is empty and being marketed, maintained, insured and secured, and a building that has been left to decay with no evidence anyone intended to use it again. The first is vacant. The second is at risk of being treated as abandoned, and the credit is then unavailable.

Where a site has both, split the assessment building by building. A unit that has been maintained can carry the credit even where a derelict outbuilding on the same site cannot.

Evidence of vacancy a council will accept

Assemble this before the application, not in response to the officer's query.

• Business rates records, including any empty property relief claimed, with the dates
• Utility accounts and meter readings showing consumption falling to nothing and the dates of disconnection
• Marketing evidence: agents' particulars, the asking terms, the marketing period, and a schedule of enquiries and viewings
• Lease and tenancy history, including the date the last tenant left and the reason
• Insurance schedules showing cover as an unoccupied building, and security and maintenance invoices
• Dated photographs, internal and external, across the vacancy period
• A statutory declaration from the owner covering the history, supported by the documents rather than replacing them

Marketing evidence is the item most often thin. A building offered at an unrealistic rent for six months does not demonstrate genuine vacancy in the way a properly marketed building does, and officers will say so. Where the property was genuinely unlettable, evidence about the market and the building's condition helps.

How the calculation is applied

Three points decide the arithmetic and each is worth agreeing with the officer in writing.

The measurement basis. Gross internal or gross external area changes the answer, and the local plan or the officer's practice will set which applies. Use the same basis on both sides of the subtraction.

Which buildings count. Only the relevant vacant buildings, so occupied floorspace on the same site is excluded, as is floorspace that has already been demolished before the application.

Whether the policy threshold is affected. Some authorities apply the affordable housing threshold to the gross scheme and the percentage to the net, others apply both to the net. That difference decides whether a scheme is caught at all.

Where the credit reduces but does not remove the contribution, a Viability Assessment may still be needed for the balance. That is a separate exercise governed by national viability guidance, and the credit should be applied before viability is tested rather than after.

Common council objections and how to answer them

Four objections come up repeatedly.

That the building was made vacant for the purpose of redevelopment. Answer with the chronology: when the tenant left, why, when the redevelopment was first considered, and what marketing happened in between.

That the building has been abandoned. Answer with the four factors, addressing each with documents, and with evidence of maintenance and insurance.

That a local policy disapplies or restricts the credit. Answer with the policy wording, its consistency with national policy, and the weight the plan carries, and be realistic where the plan is recent and clear.

That the floorspace figure is overstated. Answer with a measured survey rather than with figures from an agent's particulars or an old title plan.

Recording the position in the affordable housing statement

The Affordable Housing Statement is where the credit is claimed, and it should contain the claim, the evidence schedule, the calculation and the resulting contribution, so that the officer can check it without asking for anything.

Set out the measurement basis, the buildings included and excluded, the vacancy chronology with dates, and the arithmetic. Cross-reference the evidence appendices by document rather than as a bundle.

One distinction worth stating in the document: the Community Infrastructure Levy has its own existing floorspace deduction, and it works on the opposite principle. The levy regulations allow existing floorspace to be deducted only where the building has been in lawful use for a continuous period of at least six months within the previous three years. A building vacant long enough to support a strong vacant building credit case may therefore fail the levy's in-use test, and the same site can attract a full levy charge and a reduced affordable housing contribution at the same time.

Budget for that outcome rather than discovering it at liability notice stage. Follow changes to planning obligations and levy reform on the planning law timeline, and see how plan-making reform may change the local policies that restrict the credit.

Browse the full report index for the supporting documents a brownfield residential scheme typically needs.

This is general guidance, not legal advice. Check the position with your local planning authority or a qualified professional before relying on it.

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