Developers paying cash in lieu of building affordable homes is not new: commuted sums already form part of the planning system and are often used where on-site provision is impractical or would produce a worse outcome. However, a significant change in the recent draft National Planning Policy Framework (NPPF) is the suggestion that this route could become easier to use for medium-sized housing sites, rather than remaining something that is considered on a case-by-case basis.

The draft guidance itself still requires affordable housing to be delivered on site (allowing an off-site contribution or a cash payment only where that is robustly justified and where the objective of creating mixed and balanced communities is maintained). However, the consultation also asks whether medium developments - defined as schemes of 10 to 49 homes on sites of up to 2.5 hectares - should be able to discharge affordable housing requirements through a payment in lieu more readily. Essentially, if the current draft NPPF becomes policy, cash in lieu would apply more easily to a wider category of sites.