Government to Address S106 Issue

The recent Conservative Party conference in Manchester has heralded the next chapter in the ongoing section 106 planning policy saga.

In July Justice David Holgate deemed the changes wrought in November 2014, exempting sites of ten properties or fewer from paying contributions towards affordable housing, unlawful. The high court judgement ratified a challenge by West Berkshire and Reading borough councils.

Then, in September, the Court of Appeal gave the government permission to appeal against the ruling.

Housing minister Brandon Lewis’s recent protestations at the party conference confirm that he hasn’t given up on finding a way to circumvent this barrier to small-scale housebuilding. He’s promised to change the way Section 106 payments operate in order to enable development and prevent long delays for residential construction projects – including self-builds and extensions.

“I’m still very focused on making sure that, on sites of 10 homes or less, we make it as accessible for small builders as possible,” said Lewis, speaking at the conference.

Section 106 exemption was originally predicted to save £15,000 per home, on average, so the Court of Appeal’s ruling will undoubtedly have had a significant financial impact on current self-builders and made those currently contemplating a self-build hesitant.

Brandon Lewis now faces the challenge of finding a legally-sound solution that stimulates an increase in smaller housing projects.

While much of the UK is sorely in need of more affordable housing, one must question the logic behind making self-build more expensive in the name of supporting affordability in other sectors. Section 106 is a burden that raises the entry level to what can otherwise be a viable first step onto the housing ladder.

In 1990 smaller house builders provided over 60% of houses built. That figure has now fallen to around a third. It’s clear that if small-scale housebuilding is to receive a necessary shot in the arm, local authorities will need to start pulling in the same direction as their colleagues in Westminster.