Bending the Golden Rules? Viability and Affordable Housing in the Draft NPPF

The impact of affordable housing requirements on the viability of new development has long been a central concern for developers. Since the introduction of the ‘Golden Rules’ for grey belt sites in the 2024 National Planning Policy Framework (NPPF), this issue has taken on an added layer of complexity. This article examines the proposed changes to the Golden Rules in the draft NPPF, out for consultation until 10 March 2026, with a focus on when viability may be considered in relation to affordable housing contributions during the decision-making process.

What does the current National Planning Policy Framework and Planning Practice Guidance say about the Golden Rules, affordable housing and viability?

Under the current NPPF (December 2024), major housing development on land within or released from the Green Belt is subject to enhanced affordable housing requirements.

Until local plan policies are updated in line with paragraphs 67–68 of the NPPF, the required affordable housing contribution in paragraph 157 is 15 percentage points above the highest existing policy requirement, subject to a cap of 50%. Where no affordable housing policy exists, a 50% requirement applies by default.

Paragraph 157 then explains that the use of site-specific viability assessment for land within or released from the Green Belt should be subject to the approach set out in national planning practice guidance (PPG) on viability. At present, the PPG states that site-specific viability assessments cannot be used to reduce affordable housing contributions on sites that are subject to the Golden Rules.

Development that complies with the Golden Rules is, however, given significant weight in favour of granting permission (paragraph 158 of the Framework).

What does the draft National Planning Policy Framework say, and what are the key differences?

The draft NPPF proposes Policy GB8: The Golden Rules. The policy has three parts: Parts 1 and 2 are broadly similar to paragraphs 156, 157 and 158 of the current NPPF with some added detail relating to the provision of new green space. Part 3 of GB8 proposes a more significant change. It opens the potential to undertake viability assessments to revisit the developer contributions required under the Golden Rules (including affordable housing):

3. “There are only three circumstances in which a site-specific viability assessment may be justified to allow the contributions expected by this policy to be adjusted. These are where a development proposal is:

1. on previously developed land;
2. for a multi-phase, strategic site; or
3. for a development model which is of a wholly different type to that assumed in the viability assessment that informed the development plan.”

We broadly welcome Part 3 of proposed Policy GB8. Ultimately, without the ability to revisit viability at the point of delivery, then there is a risk that sites are not delivered, leaving a shortfall in meeting housing need. However, the extent to which this provision can apply to proposals will depend on how each criterion is defined and applied.

In terms of criterion (a), previously developed land is defined in the current and draft Framework without any proposed changes. We therefore focus on criteria (b) and (c).

What is a “multi-phase, strategic site”?

The current NPPF requires planning policies to identify strategic sites to meet anticipated needs over the plan period. Local planning authorities define strategic sites locally often by reference to scale (for example, 200 dwellings or 4 hectares or more). In addition, Homes England frequently refers to strategic sites with reference to urban extensions and new settlements in the range of 2,000 to 10,000 dwellings or more. Such wide ranging scales between the local authority and regional levels highlights a potential inconsistency with how strategic sites may be defined.

The closest reference to a definition of “strategic site” in the draft Framework appears in Policy PM12 (Developer Contributions), which refers to strategic sites as being “critical to the delivery of the Local Plan”. This requires context and judgement to be applied and does not rely solely on the scale of development.

It is therefore plausible that many ‘large’ sites upwards of 200 dwellings could be considered strategic, particularly where they are to be delivered in phases. In such cases, draft Policy GB8 may allow a site-specific viability assessment to allow developer contributions to be adjusted, but the potential for inconsistency must be noted.

What is a “development model which is of a wholly different type to that assumed in the viability assessment that informed the development plan”?

Viability modelling is a core component of Whole Plan Viability Assessments (WPVAs) that inform Local Plans. We consider that the term “development model” in criterion (c) refers to the type of development used in the viability modelling — such as land use, built form, tenure and house types — rather than to other financial appraisal assumptions such as the latest build costs, changes to building regulations and the Building Safety Levy.

This distinction matters. It may be tempting to interpret Policy GB8 as allowing the application of the wider PPG viability tests[1] to sites in the Green Belt that are subject to the Golden Rules, thereby allowing a full viability assessment to inform decision making. However, it appears the Government’s intention is to limit the circumstances in which viability can be considered for such sites by only allowing “wholly different” development models, not other assumptions affecting viability, to be taken into account.

Interpreting what is meant by ‘wholly different’ is an important question. There may be some clear-cut examples where this applies, such where the development model in a WPVA assumed two-storey family housing (2–4/5 bedrooms), but a planning application proposes age-restricted 1–2 bedroom bungalows for over-55s only, or specialist housing.

There may, however, be more nuanced circumstances where the proposed development model is wholly different from that assumed in the WPVA which informed the Local Plan — particularly where a WPVA predates July 2018, when the revised PPG on viability strengthened the emphasis on plan-stage testing and introduced more standardised inputs.

Indeed, there are often significant differences between the viability of a scheme at detailed planning stage and the applicable ‘site typology’ in a WPVA which could result in a wholly different development model being proposed. These might include:

• Significant site characteristics, such as abnormal costs and/or significant off and on site infrastructure requirements which could materially exceed the assumptions in the WPVA on which contributions were established.
• A unit mix to suit local market conditions could differ materially to assumptions for the relevant site typology in the WPVA.
• Changes to market conditions over time, particularly where the WPVA which was prepared some time ago and may be out of date.
• Site specific development constraints that could lead to different development efficiencies including net developable area and achievable density, fundamentally affecting the development model and viability when compared to the WPVA assumptions.

In such cases, where the authority’s evidence base is significantly out of date, we consider that proposed Policy GB8 in the draft NPPF may present an opportunity to undertake a site specific viability assessment to revisit affordable housing requirements. We are advising clients to monitor the final wording of the NPPF later this year, alongside any updates to the PPG, and to seek specialist viability advice at the appropriate time.

Concluding thoughts

While draft Policy GB8 introduces greater clarity on the limited circumstances in which viability may be considered for sites subject to the Golden Rules, important areas of interpretation remain — particularly in relation to what constitutes a “multi-phase, strategic site” and a “development model which is of a wholly different type”. Unless these terms are clarified through the final NPPF, updated PPG, or appeal decisions, uncertainty is likely to remain for both applicants and decision-makers.

That said, even if draft Policy GB8 is adopted broadly in its current form, it is likely to reinforce the attractiveness of grey belt sites as a source of housing supply in authorities unable to demonstrate a five-year housing land supply or with a history of under-delivery. In this context, early engagement on viability evidence, development typologies and plan-making assumptions will be critical to maximising the prospects of delivery.

The consultation on the draft NPPF ends on 10 March 2026. If you have any questions about the consultation, please get in touch with a member of the team.

With thanks to John Barber, ADS Appraisal & Development Services for his input

[1] Viability – GOV.UK