Affordable Housing supplementary planning document

The Affordable Housing supplementary planning document (SPD) adopted on 3rd June 24, taking effect from 1st July 24 sets out the process and mechanisms for providing affordable housing in Fareham. It provides information and guidance on the implementation of Fareham Borough Local Plan 2037 policies HP5: Provision of Affordable Housing, and HP6: Exception Sites.

• Affordable Housing SPD (2 MB)

The SPD, Adoption Statement (116 KB)  and Post Consultation Statement can be viewed in PDF or hard copy at the Civic Offices and libraries within the Borough as seen in the table below.

The SPD sets out the exceptional circumstances where a financial contribution for off-site affordable housing may be agreed. Where this route is agreed, the financial contribution will be calculated using the Commuted Sum Calculator. 

Commuted Sum Calculator

Although the SPD states the commuted sum calculator is available on the Council's website, due to its complex nature, the Council's Planning and Housing Teams will calculate the commuted sum using the calculator. A pdf copy of the model output will be provided to the applicant.

The Calculator is designed for the specific purpose of estimating a commuted sum and therefore assumes the scheme under consideration is viable, including an agreed percentage, mix and tenure of the affordable housing required.

The key principle underlying the Calculator is that the developer of a scheme should be broadly no worse or better off financially, whether the affordable housing is provided on site or as a commuted sum with the 'contribution' being the assessed difference in value between a 100% market housing scheme and a scheme with the required level of affordable housing on site.

How the Calculator Works

The Calculator calculates the difference between the revenue for a market unit (less an allowance for the developer return and marketing fees) and the revenue for an equivalent affordable housing unit, at the agreed percentage and tenure of affordable housing.

Market values and Affordable revenues

For both market and affordable housing values, the Calculator offers default information based on publicly available datasets as well as the option for the user to enter their own data:

For market housing

The market values are based on the evidence base supporting the Fareham Community Infrastructure Levy and can be uprated to the latest values using the House Price Index (HPI) published monthly by Land registry . Alternatively an agreed user defined value can be used on per unit basis.

For (rented) affordable housing

The Calculator offers three alternative approaches to calculating the value of social rented and affordable rented units:

• user defined
• a percentage of market value
• capitalised value of the net rent based on the appropriate Local Housing Allowance rents as set out in BRMAs  with allowances made for:
  • management/maintenance costs per annum
  • repairs reserve
  • void and bad debts, and
  • in the case of Affordable Rent – an allowance for a service charge

Noting that Fareham is covered by either the Southampton or the Portsmouth BRMAs and the Calculator uses Local Housing Allowance published May 2024.

• For shared ownership only the Calculator uses data for:
  • average percentage purchased
  • rental on unbought share
  • capitalisation rate
  • repairs reserve