Vacant Building Credit Reinstated

Following a recent Court of Appeal Decision the controversial Vacant Building Credit (VBC) has been reinstated. It operates by providing a financial credit equivalent to the existing gross floor space of relevant vacant buildings when the Local Planning authority calculates any affordable housing contribution.

The credit was withdrawn in July 2015, just over six months after its introduction, following a landmark High Court ruling that overturned the affordable housing exemption policy by the government. The VBC was removed from the Planning Practice Guidance (PPG) at the same time as the affordable housing exemption, but a Court of Appeal judgement last month quashed the ruling and it has now been reintroduced.

VBC was first introduced in November 2014 to incentivise the reuse of vacant buildings and to encourage the development of brownfield sites. The introduction into the PPG was at the same time as the policy exempting sites of fewer than ten units from affordable housing contributions.

Authorities can consider ‘whether the building has been made vacant for the sole purpose of redevelopment’. They can also consider whether the new permission ‘is covered by an extant or recently expired planning permission for the same or substantially the same development’.

It is considered that the PPG currently only provides limited guidance on how the VBC is to be calculated and applied in practice. For example, the PPG states that it would not apply if the building is abandoned, but there is no detailed explanation on how such a determination should be made.

The PPG also states that in order to claim the VBC it will apply to any relevant vacant buildings being brought back into any lawful use, therefore not just residential use. It would also apply to buildings ‘demolished as part of the scheme’ which implies that it will not apply where buildings have been demolished prior to the submission of a planning application.

If you have any queries on VBC, please do get in touch.

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