In a somewhat unexpected move, this week (28 January), the Government issued a planning policy statement called ‘A roadmap for Section 106 delivery in England’, which sets out some pretty substantial policy changes.  The policy covers other aspects of the S106 system, but the headline-grabber is undoubtedly the changes to unlock stalled sites by changing tenures. It uses the word ‘emergency’ five times.

Background: Section 106 is one of the main ways affordable housing is delivered. Planning permission is made conditional on the developer providing a percentage of the homes as one or more of the affordable tenures. However, there have been well-publicised problems with it as an approach over the last few years, and developers have found it increasingly hard to find RPs willing to take the units. S106 often requires the affordable housing to be delivered first or at least early, so wider sites can be held up.

The Government has already tried several other solutions, including the Section 106 Affordable Housing Clearing Service, without enormous success.

The new policy says that, where all reasonable endeavours have been used to find an RP, LPAs are ‘expected’ (not ‘encouraged’ or ‘permitted’) to allow renegotiation of the S106 to vary the tenure. Effectively, this means any units due to be completed by 1 December 2027, and that have been on the clearing service for six weeks, are eligible to change tenure. LPAs should try to secure another affordable tenure first; if this is not possible, units can become market sale. The law hasn't changed, so this has to be done in the usual way, by deed of variation.

Will it work? Developers and RPs alike will say that S106 variations can already take too long. Will there be prolonged haggling while LPAs work through the cascade of affordable tenures? Will we see a glut of new applications, further slowing the process? Nonetheless, the Government's sense of urgency is clear and, frankly, refreshing.

If this affects one of your schemes, then get in touch, and we can guide you through the new process.