DCLG to create section 106 viability guidance

Guidance to help councils considering requests from developers to reduce affordable housing obligations will be issued by the government, the Growth and Infrastructure Bill has revealed.

Affordable homes: policy in new bill. Steve Morgan pic
Affordable homes: policy in new bill. Steve Morgan pic

The bill says that local planning authorities determining requests from developers to modify or discharge section 106 affordable housing obligations should "have regard to guidance issued by the secretary of state".

The news of the guidance was welcomed by Matthew Spry, director at consultancy Nathaniel Lichfield & Partners. He said: "There will inevitably be vigorous debate on how viability is determined. Guidance will be much welcomed if it adds clarity."

Clause 5 of the bill is intended to allow the modification or discharge of affordable housing elements of section 106 agreements in order to make developments viable.

However, Marnix Elsenaar, head of planning at law firm Addleshaw Goddard, said that the measures stopped short of proposals set out in a statement issued by communities secretary Eric Pickles in September, which said that new legislation would enable "any developer of sites which are unviable because of the number of affordable homes to appeal with immediate effect".

Elsenaar said: "We all thought there would be a fast-track direct appeal to the Planning Inspectorate, but clearly that hasn't been followed up, because the application has to be made to the relevant planning authority first."

The bill proposes that any section 106 modification made by the inspectorate only applies if the development is completed within three years, after which time a new agreement must be negotiated between the developer and local authority.

Tim Pugh, partner at law firm Berwin Leighton Paisner, said it would be "really tricky" for some larger developments to be completed within three years. "That is a big ask for a big development," he said.

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