Question to the Ministry of Housing, Communities and Local Government:

To ask the Secretary of State for Levelling Up, Housing and Communities, what steps his Department is taking to ensure that commercial premises that are converted to residential use provide an adequate level of (a) affordable housing and (b) homes for social rent.

Commercial premises can be converted to residential use under permitted development rights. Under current guidance, contributions for affordable housing should not be sought for permitted development.

The Levelling Up and Regeneration Act 2023 (the 2023 Act) introduces powers to create a new Infrastructure Levy which will reform the existing system of developer contributions in England. It will be possible for the Levy to capture land value uplift associated with permitted development, subject to provision that is made in regulations. Under our current proposals, the Infrastructure Levy will capture value uplift associated with the change of use of commercial buildings to residential use, whilst recognising the need to preserve the viability of brownfield development schemes. We are currently analysing responses to our recent technical consultation which sought views on this proposed approach.

If the Levy is charged on development it can be used to fund social housing within the meaning of Part 2 of the Housing and Regeneration Act 2008, and any other description of housing that Infrastructure Levy regulations may specify. This is set out in new section 204A(4) (in Schedule12 of the 2023 Act). This includes Social Rent homes and Affordable Rent homes.

Following the conclusion of the first two rounds of the Local Authority Housing Fund in 2024, an evaluation will be conducted which will include an assessment on the delivery routes that participating local authorities have taken.