Shelter reveals legal loophole has been used by housing developers to avoid building 706 social homes.

September 29, 2017

New research from Shelter reveals that a legal loophole has been used by housing developers to avoid building 706 social homes in Kensington and Chelsea – more than enough to house families made homeless from the Grenfell tower fire.

The research reveals that despite being required by local planning policy these homes haven’t been built in large part due to a legal loophole, called a “viability assessment”. Developers first win planning permission by promising they will build a chunk of affordable homes in the scheme. But they can then come back to the council to say they can’t build the affordable homes as it would reduce their profit margin, using a secret viability assessment to support their argument. The result is that they end up not having to deliver the affordable housing promised.

In Kensington and Chelsea the loophole has been used by developers to reduce the amount of affordable housing from the council’s policy target of 50% to only 15% on those schemes. This gap between the council’s target and what was eventually permitted is equivalent to 831 affordable homes, of which 706 would have been social homes, which have not been built.

So far the vast majority of families have not been rehoused following the Grenfell tower fire, according to the latest government figures. At a time when affordable housing is needed across the country more than ever, Shelter is calling on the government to change the law so big developers can no longer use the loophole to boost profits.

 

Shelter chief executive, Polly Neate, said: “At a time when we desperately need more affordable homes, big developers are allowed to prioritise their profits by building luxury housing while backtracking on their promises to build a fair share of affordable homes.

“The government must make sure we treat affordable housing commitments as cast iron pledges, rather than optional extras, and act now to close the loophole that allows developers to wriggle out of building the affordable homes this country urgently needs.”

 

Allen Walkey

Highly experienced businessman with a successful career in property sales and investment both in the UK and abroad. Now a freelance writer and blogger for the property and Investment Industry, keeping readers up-to-date with changes and events in a rapidly changing world.

You May Also Enjoy

Estate Agent Talk

Mortgage overpayments in a confident market

Financial experts are encouraging homeowners and first-time buyers to take a fresh look at mortgage overpayments as confidence builds in the UK property market and interest rates begin to ease. With major lenders cutting rates, improved loan-to-value options for buyers, and growing optimism in the 2026 market, mortgage overpayments are emerging as a powerful and…
Read More →
Breaking News

House price growth remained subdued in August

UK annual house price growth remained broadly stable in August at 1.6% House prices were up 0.2% month on month Headlines Aug-26 Jul-26‡ Monthly Index* 550.1 549.1 Monthly Change* 0.2% -0.1% Annual Change 1.6% 1.4% Average Price (not seasonally adjusted) £275,465 £276,581 * Seasonally adjusted figure (note that monthly % changes are revised when seasonal…
Read More →
Letting Agent Talk

What Adds Three Weeks to Leasehold Conveyancing?

As government reforms target a four-week reduction in homebuying times, Konnect You analysis points to management packs, extra lease enquiries, third-party responses and title issues as recurring leasehold bottlenecks. The government is targeting a reduction of around four weeks in the homebuying process through reforms published in June 2026. Its roadmap proposes more property information upfront and recognises that leaseholders can face delays…
Read More →
bank of england interest rate
Breaking News

Bank of England Money and Credit Report July 2026

Overview These monthly statistics on the amount of, and interest rates on, borrowing and deposits by households and businesses are used by the Bank’s policy committees to understand economic trends and developments in the UK banking system. Key points: Net borrowing of mortgage debt by individuals decreased to £4.3 billion in July, from £7.7 billion…
Read More →
Breaking News

Breaking Property News 1/9/26

Daily bite-sized proptech and property news in partnership with Proptech-X.   infinitSpace to be new operating partner providing technology and operational infrastructure The Stack, Amsterdam’s new home for AI founders and builders, has selected infinitSpace as its Workspace Operating Partner ahead of its opening in September. The partnership will provide the technology and operational infrastructure behind The…
Read More →
Breaking News

Why Living Near London’s Top Schools Costs a Fortune

Homes near London’s top private schools command premiums of up to 77%   The latest research from London lettings and estate agent, Benham and Reeves, has revealed that homes located close to some of the capital’s highest-ranking private schools command substantial premiums, with property values sitting as much as 77% above the wider local authority average.…
Read More →