Q&As

The definition of ‘affordable housing’ set out in Annex 2 of the National Planning Policy Framework states that affordable housing includes discounted market sales housing, which is housing ‘sold at a discount of at least 20% below local market value’. What is the meaning of ‘local market value’ in this context?

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Produced in partnership with Emily Knowles and Sarah Rhodes of Sharpe Pritchard LLP
Published on LexisPSL on 27/11/2019

The following Planning Q&A Produced in partnership with Emily Knowles and Sarah Rhodes of Sharpe Pritchard LLP provides comprehensive and up to date legal information covering:

  • The definition of ‘affordable housing’ set out in Annex 2 of the National Planning Policy Framework states that affordable housing includes discounted market sales housing, which is housing ‘sold at a discount of at least 20% below local market value’. What is the meaning of ‘local market value’ in this context?
  • The National Planning Policy Framework
  • Meaning of ‘local market value’
  • Summary

The National Planning Policy Framework (NPPF) defines discounted market sales housing as housing ‘sold at a discount of at least 20% below local market value’. This can be interpreted as meaning the open market value as measured according to the local area in which the housing project is being provided. The calculation of local market value is focussed on regional factors, eg property values in the local area. The focus on taking local factors into account is reinforced by the next sentence of the NPPF’s Annex 2 definition for discounted market sales housing which states that ‘eligibility is determined with regard to local incomes and local house prices’. Therefore, it is not possible to provide an exact definition of ‘local market value’, but it will be for the local planning authority, and often the developer, to agree the appropriate measure for the local market, taking into account local incomes and house prices in particular, and potentially other local factors.

The National Planning Policy Framework

The NPPF itself is, by its nature and as indicated in its title, a generalised document providing a framework for national planning policy. However, when considering affordable housing and what constitutes affordable housing, local factors are clearly an important element of the assessment and to ignore local circumst

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