Appeal 6005389

The appeal is dismissed.

I have removed the word ‘vacant’ from the beginning of the cited address, as this does not describe a physical location. I have taken the description of development above from the decision notice and appeal form, as the proposal reduced from 66 apartments to 56 during the application determination period.

The main issue is whether the viability of the proposed development justifies the lack of off-site financial contributions towards affordable housing and green infrastructure.

The site lies between the long cul-de-sacs of [address] to the north, and [address] to the south. It is predominantly grassed, with mature trees along its southern perimeter, and on-street parking to the north and south within the site boundary. The wider area is largely residential with a mix of dwelling styles, with predominantly small cul-de-sac estates of 1 and 2 storey homes to the immediate north and south of the site.

The proposal is for 56 apartments across three blocks; 12 one-bedroom and 44 two-bedrooms. Two of the blocks would be 3 storeys, and the easternmost would be 5 storeys. Shared bin and cycle stores and residents’ garden space would lie in between, with formalised on-street vehicle parking spaces.

Although the site has lain undeveloped for a long period and is informally used for recreation, there is no dispute that it comprises previously developed land. It is allocated for residential development under Policy H2 of the Liverpool Local Plan 2013-2033 (‘the LP’), with a net capacity of 68 dwellings. Notwithstanding it’s value to the local community as an informal local amenity space and in providing visual amenity, the development plan deems it to be surplus to requirements as an open space. The proposal is thus acceptable in principle. This includes its dwelling mix, whereby the Liverpool Strategic Market Housing Assessment (SHMA, 2016) and Update (2017) which informed the LP, conclude that for private homes the majority need is for 2 and 3 bedrooms.

Based on the specific site and proposal, the LP requires several off-site financial contributions. Policies STP4 and SPT5 identify that contributions via planning obligation are required to meet the needs for additional or improvements to existing local and strategic infrastructure, services and facilities, that would mitigate and/or compensate for the impacts generated by the new development.

The signed [name] provides for a total payment of £69,343 (rounded). This equates to policy-compliant contributions of £50,000 to introduce EV charging infrastructure (LP Policy TP8), £15,583 for mitigation of recreational pressure on protected habitats sites (Policies STP3 and GI6), and a £3,760 monitoring fee.

The LP Policy H3 requires housing developments of 10 or more dwellings to provide 20% of the dwellings as affordable. These should comprise 80% social/affordable rent, and 20% intermediate (shared equity housing) provision. In determining all proposals, the character and location of the site is to be taken into account, with the final mix of dwelling types and sizes being subject to negotiation. Applicants are required to provide sufficient evidence in support. Viability is not directly referenced, but Policy STP5(4) identifies that where viability is identified as an issue, a site specific independent financial evaluation will be required to demonstrate to the Council that a development will be unviable as a consequence of the developer contributions. The appellant contends that their appraisals demonstrate that no affordable housing can be provided.

[name] has expressed interest in acquiring units within the scheme, and the Council has accepted that [name] would be unlikely to take on affordable housing as part of a mixed tenure scheme. If an affordable [name] scheme were offered directly by the appellant, this would reduce viability due to the lack of capital receipt, and impact on raising development finance. Nonetheless, I am unconvinced as to why [name] or discounted market sales housing could not be provided on site, if viable. Even if discounted new-build values may still exceed existing market values, which may not be the most effective approach to meet local affordable housing need, it could still enable households to purchase apartments who otherwise could not access home ownership.

Nevertheless, the Affordable Housing Planning Practice Advice Note (‘the [name], 2023) identifies that a commuted payment in lieu of on-site provision could be acceptable. A policy-compliant affordable housing contribution would equate to approximately £617,000, which the Council would accept as a commuted sum rather than insist on on-site provision. My overall conclusion is therefore based on whether the proposal holds sufficient viability so as to require a contribution, and not whether affordable housing should be provided on-site.

The statutory 10% BNG requirement does not apply, due to the application’s submission date. Nonetheless, the [name] GI10 and STP2, and the Biodiversity Net Gain Policy Advice Note (‘the [name]), require that development proposals should contribute to ensuring a net gain in biodiversity in the City, and achieve net environmental gains. The Framework paragraphs 187 and 193 also identify that decisions should contribute to and enhance the natural and local environment, and that biodiversity harm should be adequately mitigated.

The proposal would result in an on-site biodiversity loss of 84.34% habitat units (minus 2.83 units) and a net gain of 100% hedgerow units (plus 0.63 units). The BNG PAN specifies that it should provide at least a net gain of 0.5 biodiversity units, based on its footprint size. As this could not be provided on-site, a financial contribution of £67,754 is sought1.

The site lies within the [name], which at only 12% canopy cover is within the lowest third of Liverpool wards. There is no objection in principle to the loss of 9 of the 10 trees on site, including 3 under a Tree Protection Order, as retention would result in a lower quality scheme as regards place making and housing quality. This is also because 18 replacement trees are proposed on-site, including 2 larger semi-mature trees. However, the LP Policy GI8 requires replacement of trees lost plus an additional tree per dwelling proposed, so there is a shortfall for which a commuted sum payment is required. This is calculated as £22,400.

The proposal would develop on the site of existing informal open space, with no new public open space provided on-site. Several documents forming the LP evidence base highlight the need for investment to improve Liverpool’s sport, leisure, and recreation infrastructure. The LP Policies GI10 and H14 therefore seek financial contributions towards the creation of new off-site green infrastructure provision, or to enhance and improve existing provision off-site, calculated as £56,000.

Due to the proposal’s suggested lack of viability, none of these financial contributions are offered. The appellant also maintains that the new trees, hedgerow, and other on-site vegetation and biodiversity measures would in any case represent meaningful ecological improvements, and that the policies include flexibility for provision. However, I find they would be insufficient as a total package such that the contributions are required, subject to viability.

At the point of determining the application based on September 2024 modelling, the Council accepted that the scheme’s viability would not allow for the cumulative payment of all the above contributions. At that point, the Council considered that a total package of £323,000 would be viable, and sought the shortfall of £253,657. The Council’s subsequent valuation exercises assert that up to £903,860 is now viable, but maintains the £253,657 as the additional contribution sought. The Council’s priority for this payment is towards affordable housing provision. 1 Requirement is 2.7 units x £25,094 = £67,753.80.

Gross Development Value (GDV) is an assessment of the total value of a development, informed by evidence of current achievable values for the type and tenure of apartments proposed. The Planning Practice Guidance (‘the PPG’) identifies that for viability assessment of a specific site or development, market evidence from the actual site or from existing developments can be used, which should be adjusted to take into account variations in use, form, scale, location, rents and yields, disregarding outliers2. The Council’s GDV for the latest scheme iteration is £9,949,320, justified as significantly higher than the appellant’s £8,395,000 GDV due to specific market evidence and inflationary increase.

[name] to allow this appeal, there is nothing before me to suggest that the proposal could not be progressed under a Build to Rent investment model. Although the appellant argues that viability appraisals do not routinely consider this, one of the appellant’s other site examples did appraise this approach, and that generated a higher value than private sale. Consequently, I cannot entirely rule out the prospect that the appeal proposal may be more viable under this approach. Although high profile failures associated with Build to Rent in Liverpool are referred to, the evidence before me does not indicate a local moratorium against that model, and its consideration has been suggested by the Council.

The Council also places particular reliance on sales at the City Residence scheme, a modern development less than 200m to the west of the appeal site. Despite some unreliability of asking prices compared to actual or likely sales achieved, I see no reason why the appeal site apartments may not attract similar overseas investor purchasers, and other direct sales are also identified on the [name]. The appellant’s evidence is less comparable to the appeal site proposal as it relates to resales, and to schemes further away, including the conversion of [name]. I therefore give the Council’s evidence more weight in this regard.

In addition, at 70sqm floorspace the proposed one-bedroom apartments are generously sized and larger than typical, including significantly larger than that required by the [name]. Those 2-bedroom apartments of approximately 85sqm would also be generous in this location, notwithstanding the Building Regulations Part M4(2) and (3) standards. The Council acknowledges that this ‘extra’ floorspace would not result in a pro-rata market value uplift compared to smaller apartments. However, the evidence suggests that increased value based on size would be realised. Indeed, if not, I find it unclear why larger sizes would therefore be incorporated.

The appellant’s latest appraisal also identifies the advantage of splitting the site into 3 phases for the modelling, whereby sales values for the later phases have the potential for review as development progresses3. This would allow a benefit from the uplift in any positive movements in the general house index, alongside any localised improvements arising out of improved market perceptions of the site and surrounding area in response to evidence of the previous phases. If the Council were also therefore to take this approach, there is the possibility that sales values may be even higher. 2 Paragraph: 012 [name]: 10-[phone]; Revision date: 24 07 2018. 3 Paragraphs 6.12 - 6.14, Resolve106, Appeal Technical Statement 22nd January 2026.

Based on the range of comparative examples before me, overall I therefore find the appellant’s market values of the apartments to be too low, plus there is uncertainty over the potential for Build to Rent. Even if I were to allow some leeway against the Council’s figures, the differences would remain relatively significant.

The Liverpool Local Plan Viability Assessment (LPVA, 2018) formed part of the LP evidence base, and used a benchmark developer profit of 20% on GDV. The PPG advises, albeit for the purpose of establishing the viability of plan policies, that a profit assumption of 15-20% of GDV may be considered a suitable return to developers4. The Council has thus maintained that the profit benchmark should be 15% on GDV (exclusive of finance costs), and also refers to 15% having been used for assessments elsewhere in Liverpool.

The appellant originally considered a higher level is appropriate given the LPVA and specific scheme risks, although I do not find these to be clearly identified beyond the likely existence of remnant foundations. [name] 2024 they identified that a return of 23% of GDV inclusive of finance costs (21.5% of GDV net of finance costs) was necessary to gain development funding. [name] 2024 they proposed that even using the Council’s GDV estimate (and including the proposed £69,343 contribution), the 17.7% of GDV gross rate of return would be too low. The same arguments were made following subsequent updates indicating a profit of 17.15% in July 2025.

Following further refined appraisals from both parties, and including due to a slightly amended methodology to separate out contractor’s overhead and profit, the appellant identifies their final submitted residual developer profit would be £907,3575. This is equivalent to 10.81% on GDV, which they acknowledge falls short of the minimum 15% advocated by PPG, but state it may be considered to be marginally viable, and that as such there remains a positive prospect for the site being brought forward for development.

In my being asked to accept 10.81% as the minimum profit, the evidence before me does not entirely discount the potential that the significantly higher [name] have accepted above could thus still allow for this same profit level or higher while incorporating an increased financial contribution. On this basis, I am satisfied that I have duly considered matters of profit to allow progress to my overall conclusion, because the GDV is the fundamental point of conflict6.

I acknowledge the appellant’s evidence comparing the appeal site’s ‘Zone 1’ location7 against recent Council resolutions to grant permission for four sites in Zone 3. Those sites were assessed as being unable to support a lower planning obligations package per dwelling than is sought for the appeal site. Nonetheless, my determination is made on the location and form of the specific proposal before me. Three of these proposals are significantly larger, and all would be of a different layout and apartment schedule, with different costings. 4 Paragraph: 019 [name]: 10-[phone]; Revision date: 09 05 2019. 5 Resolve106, [name] – Planning Obligations & Viability; 22nd April 2026. 6 Paragraph 3.21, Resolve106, [name] – Planning Obligations & Viability; 22nd April 2026. 7 Zone 1 identified as the lowest value area of Liverpool in the LPVA 2018, Zone 3 is a higher value zone.

The difference of opinion regarding the estimated GDV is acknowledged as significant, and comprises the fundamental issue of disagreement. I have explained above why I prefer the Council’s sales figures, and also that there is a lack of information on Build to Rent profitability, and potential increased sales values if a phased development may be assumed.

I also note that the appeal has not explored the potential for a viability review mechanism within a S106 legal agreement to seek additional contributions if viability improves over time, as identified in an earlier document8. This again indicates uncertainty that no further contribution may be possible at all.

The appellant asserts that the extent of financial contribution offered at £69,343 is already in excess of that which is financially viable. They also reference additional abnormal costs which may be higher than the benchmark land value. However, all the matters I have considered lead me to conclude significant uncertainty that this is the maximum possible. I find a not inconsequential additional amount of financial contribution would most likely be viable. On this basis, I find that the proposal would be conflict with the [name] H3, H14, GI8, GI10, STP2, STP4, and STP5, for the reasons as outlined above.

The Georgian terrace at 107 and [address] are [name] listed buildings, former dwellings. Their significance lies in their group architectural and historic interest in reflecting the development of Kirkdale within the city. The buildings are brick with stone dressings, at three-storey above semi basements hidden behind entrance steps. They are occupied by Rotunda, following a recent major refurbishment with façade restoration to an authentic appearance. The listed buildings are already located within an area of more modern character, and the appeal proposal would respect their height and materiality. I have no substantive reason to disagree with the Council's assessment that the significance of the special architectural and historic interest of their setting would be preserved.

The site lies within the [name] of [name] and North Wirral Foreshore Special Area of Conservation, Special Protection Area, and Ramsar site, and so is afforded protection under the Conservation of Habitats and Species Regulations 2017 as amended (the Habitat Regulations). As the Competent Authority, I may only grant permission after having ascertained for myself that the proposed development would not affect the integrity of this or any other protected site. The LP Policies STP3 and GI6 reiterate the Habitat Regulations, such that adverse effects should be avoided and/or mitigated to ensure that the integrity of internationally important sites is protected, and a conclusion of [name] on Integrity can be drawn.

There are likely significant in-combination effects on this protected site resulting from increased recreational pressure from new housing. The proposal would therefore provide a mitigation payment of £15,582.56 plus a householder leaflet, which together satisfies the Council of no adverse effects. Nonetheless, as I am dismissing the appeal on other grounds, my further consideration of the proposed mitigation would not be determinative. 8 Paragraph 1.16, Resolve106, Financial Viability Assessment 22 nd July 2024.

The contribution of 56 sustainably located apartments towards the Liverpool housing need would be a significant benefit. Support on this basis comes from the [name] STP1 and STP2, and also the Framework paragraph 61 which identifies the Government’s objective of significantly boosting the supply of homes, and that it is important that a sufficient amount and variety of land can come forward where it is needed. Paragraph 129 reinforces that decisions should support development making an efficient use of land, and the site would make use of vacant previously development land.

30% of the dwellings would meet the category M4(3) standard for being wheelchair accessible, in excess of the 10% requirement set by the LP Policy H12. This holds moderate weight in favour, in helping to increase the under-supply of wheelchair adaptable housing within the city. It gains support again from the Framework paragraph 61 in meeting the needs of groups with specific housing requirements.

The new apartments would also deliver economic benefits from their construction and from spending from new residents. References to the Employment and [name] include that it would be secured through a legal agreement, which has not been provided, nonetheless this has not been determinative and I take the provision of employment and training opportunities to be a benefit. I give moderate weight to the overall package of economic benefits.

I give minor weight to the package of highways improvements works, which would include traffic calming, footway resurfacing and dropped kerbs, and the provision of electric vehicle charging facilities.

The Framework paragraph 59 advises that the weight to be given to a viability assessment is a matter for the decision maker, having regard to all the circumstances in the case, including whether the plan and the viability evidence underpinning it is up to date, and any change in site circumstances since the plan was brought into force. The PPG repeats this and further identifies that the weight to be given includes the transparency of assumptions behind evidence submitted as part of the viability assessment, and that the decision maker should consider whether the assessment and its conclusions are objective, reasonable and realistic9.

The site is allocated for housing, but in order for the on-site losses to be acceptable in principle, that allocation assumes policy compliance to mitigate its development impacts. This is especially and particularly in the context that the Council has a 5 year housing land supply, which although not a ceiling to further development, does not rely upon the site’s delivery for its achievement. The benefits of market housing would be tempered by the lack of affordable housing, which would be precluded on the site in perpetuity, and so would conflict with the [name] of Policy STP2 by not contributing towards mixed and balanced communities.

In this context, there is an urgent need for affordable housing. The SHMA calculated a need for 386 affordable homes per annum. The Strategic Housing Market Needs Assessment (2025) identified an increased need of 2,384 affordable homes per year. The site is located within its ‘[name] sub-area’, having the 9 Paragraph: 009 [name]: 10-009-20251216; Revision date: 16 12 2025. second highest need for these homes. The Framework section 5 clearly supports the provision of affordable housing to address the needs of groups with specific housing requirements.

The proposed benefits and support gained from the site’s allocation, would also be tempered by the lack of green infrastructure contributions, and the loss of mature trees, biodiversity, and local recreation space. This would result in the LP and Framework policy conflicts I have identified above. Although the Council has prioritised affordable housing contributions above green infrastructure contributions, their lack is still something to weigh in the planning balance.

In this context, I have to be very confident that no additional financial contributions could be possible. Even in the context of challenging national and global economic circumstances, for the reasons outlined above I do not have such confidence, and have found that a not inconsequential additional level of financial contribution is most likely viable. The proposal would conflict with the development plan, and cause harm which should otherwise be mitigated to a greater extent.

In conclusion, the proposal would conflict with the development plan as a whole. There are no material considerations that indicate that a decision should be made otherwise. Therefore, the appeal is dismissed.