Section 106 Exemption Confirmed for Self-Builds, Extensions & Annexes

Eric Pickles has today confirmed plans to exempt self-builders and renovators from planning contributions under Section 106.

The measure means sites of 10 units or less are exempt from affordable housing and tariff-style contributions under Section 106. This will include self-builds, extensions and annexes.

Build It magazine understands the change will be effective immediately.

The policy will save self-builders and homeowners keen to extend their properties an average of around £15,000 per home.

Section 106 allows local authorities to charge a development fee as a ‘planning obligation’ attached to a piece of land. The scale of these fees is often unknown until very late in the planning stages for a project. What’s more, payment is usually required before work can begin on site. This can have a devastating impact on the viability of self-builds, extensions and similar schemes.

The government launched a consultation on a proposed 10-unit threshold for Section 106 affordable housing contributions earlier this year. It received responses from hundreds of developers, organisations and individuals – including self-builders.

The exemption mirrors the existing relief for self- builds and extensions from the Community Infrastructure Levy. The CIL is due to supersede Section 106 contributions in April 2015).

What projects are exempt from Section 106?

The relief is designed to support and incentivise self-builders and small-scale developments (especially on brownfield land) without adversely impacting on local contributions to affordable homes and infrastructure.

In urban areas, the threshold for Section 106 affordable housing and tariff-style contributions will be 10 units with a maximum combined floor space of 1,000m2.

For designated rural areas, such as national parks and areas of outstanding natural beauty, authorities will be able to implement a lower 5-unit threshold if they wish. In these areas, charges levied on developments of 6-10 units will be commuted until after they’ve been completed.

The exemption will also apply to extensions and annexes.

This will be a massive boost to the self-build and custom build sector,” said communities secretary Eric Pickles. “Overnight in many parts of England, it will be cheaper to build an extension, a family annex or just build your own home. Our long-term economic plan is helping hardworking people.”

“There is no denying that we need affordable housing, but trying to squeeze ever higher contributions out of every last site is having a devastating and counter-productive effect on small scale development,” said Brian Berry, chief executive of the Federation of Master Builders. “The new 10 unit threshold for affordable housing contributions is a sensible and proportionate approach.”