Why Landowners Should Consider Selling Now: The Affordable Housing Threshold Is Squeezing Value
In recent years, London councils have been progressively lowering thresholds that trigger affordable housing requirements. What once applied only to developments of 10 or more homes is increasingly now impacting much smaller sites — often capturing small-scale development in the policy net.
The “Magic Number” Is Shrinking — and It’s Hurting Small Developers and Landowners.
For years, the National Planning Policy Framework (2018) set a clear threshold: affordable housing contributions only kicked in for developments of 10 dwellings or more, or those exceeding 1,000 sqm. With certain exceptions in designated areas, this “magic number” allowed many small-scale developments to proceed without hefty extra costs.
But that safety net is rapidly disappearing. As local councils face mounting pressure to deliver more affordable housing, the threshold is being reviewed, reduced, and in some boroughs, virtually erased. What might appear to be a positive, socially driven policy on a national stage is, in practice, putting disproportionate strain on small developers and — crucially — on landowners.
Across high-demand boroughs such as Islington, Camden, Hackney, Tower Hamlets, Southwark, and Brent, small-site contributions are now routinely applied even when developments fall below the 10-unit threshold. The sums involved are no small change: in many cases, they exceed £50,000 per dwelling. This can decimate project viability, reduce developer appetite, and — inevitably — drive down land values.
For landowners, the implications are clear: the longer you wait, the greater the risk that planning obligations will strip value from your site. The “magic number” is shrinking, policies are tightening, and developers are becoming increasingly cautious.
If you want to maximise your land’s worth, the time to sell isn’t next year — it’s right now, while the window is still open.
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karl@kallars.com