In last month’s Autumn Statement, the Chancellor of the Exchequer announced that the Government would publish a consultation paper on proposals to introduce a 10-unit threshold for Section 106 affordable housing contributions in order to “reduce costs for small house builders” and, thus, increase house building.
Section 106 contributions, also known as ‘planning obligations’, stem from agreements made between a local planning authority and a developer to address concerns about the costs of providing new infrastructure or affordable housing levels. Under the agreement, the developer makes affordable housing or financial contributions towards local facilities and infrastructure in order to secure planning permission.
Currently, local authorities can set their own policies for affordable housing, meaning that they can vary quite a bit, depending on the size of the development site, number of homes proposed and the size of the local population.
If the proposals to be consulted on are accepted, developments of fewer than 10 units could become exempt from Section 106 payments. No date for the consultation has been given yet.
