Vacant Building Credit (VBC) was re-introduced into the NPPG in May 2016 to less vocal opposition than
it faced when originally introduced following a Ministerial Statement in November 2014.
The Statement remains intact following the Court of Appeal's ruling that it
The broad premise of VBC is that is acts as a credit which
can be offset against the affordable housing requirement of new
development. The credit is equivalent to the existing gross
floorspace of a vacant building brought back into use or demolished
for redevelopment purposes. However, neither
'abandoned' buildings or those vacated for the sole purpose
of redevelopment are able to benefit from VBC.
Unhelpfully, the NPPG gives no guidance on how VBC is intended
to be applied. Two immediate issues arise:
What is meant by "vacant"?There is a concern that VBC
will incentivise landlords to force the vacation of offices,
industrial buildings or even houses to benefit from VBC.
There is also little assistance on where the line can be drawn to
assess whether a building is "vacant" or
What is meant by the "gross floorspace" of
the vacant building – GIA over GEA? Once that has been
confirmed, how that floorspace should be applied to calculate the
As a consequence, local authorities
are left to make sense of how to apply VBC, and inevitably are
creating methods and policies for approaching VBC in a way
which will minimise its impact on affordable housing
delivery. Emerging practice includes:
(i) interpreting "vacant"
as being opposite to the "in use" building test set out
in the CIL Regulations. This ensures that a
development is unable to benefit from both VBC and the demolition
credit which can reduce the amount of CIL payable;
(ii) requiring the entire building
to be vacant, not just part of it;
(iii) requiring the building for
which VBC has been sought to have been actively marketed for a
specified period (and for the method and details of marketing to be
(iv) requiring details of existing
floorspace to be provided on a GIA basis when a planning
application is submitted.
Of those local authorities that are putting in place policies
for calculating VBC, it is clear that there is no standard
approach; others will be reviewing whether they apply VBC at
all. The West Berkshire appeal confirmed that the VBC
policy is a material consideration and is not capable of being
applied in a "blanket" manner; many local authorities
will be taking comfort from this, possibly even reviewing how Local
Plan policies can be formulated to disapply VBC altogether.
VBC was introduced on the basis it would assist smaller
developers deliver viable schemes, however the Government has
failed again to build the necessary clarity into the guidance to
ensure that it is only small developments which benefit from
Left to local authorities to put in place their own mechanisms
provides no guarantee that VBC will assist those it was intended
to; as a consequence VBC's long-term impact on affordable
housing remains potentially damaging at a time when the need for
affordable homes remains critical, while the ability to rely on it
to bring forward otherwise uneconomic schemes remains unclear.
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