Pincher: Replacement Of Section 106 To Put ‘More Ammunition In The Hands’ Of Councils

Speaking to the House of Lords Built Environment Committee, which has been undertaking an inquiry into meeting the UK’s housing demand, Christopher Pincher said the “new system that we develop should provide at least as much affordable housing as the present one”. The government’s proposed planning reforms include replacing Section 106 and the Community Infrastructure Levy with a single new levy in a bid to ensure that affordable housing and infrastructure agreed by a developer is delivered “as expected” and on time. Read more on Inside Housing.

https://www.insidehousing.co.uk/news/news/pincher-replacement-of-section-106-to-put-more-ammunition-in-the-hands-of-councils-73170 

HCLG Committee ‘Unpersuaded’ That Planning Reforms Will Make System Quicker

The Housing, Communities and Local Government Committee has published its first report on the future of the planning system in England. The report expressed concern over “the lack of detail” in the government’s vision for a new zonal planning system in England, which included proposals to split the planning system into three categories of development zones (growth, renewal and protected) and replacing Section 106 agreements and the Community Infrastructure Levy (CIL) with a single Infrastructure Levy. Read more on the Rural Services Network website.

https://www.rsnonline.org.uk/hclg-committee-unpersuaded-that-government-planning-reforms-will-make-system-quicker 

Chief Planner Hints At Backtrack On Section 106 Reforms

Joanna Averley says government will proceed ‘incredibly carefully’ with proposed changes to the developer contribution system. The government appears set to row back on radical proposals set out last summer to ditch the current Section 106 system in favour of a flat-rate infrastructure levy across England. In comments to an online event hosted by the Campaign to Protect Rural England, housing ministry chief planner Joanna Averley said the government will instead proceed “incredibly carefully” in bringing in any reforms. She said it was “very aware” of the “micro” nature of landscapes and housing markets in England. Read more on the Housing Today website.

https://www.housingtoday.co.uk/news/chief-planner-hints-at-backtrack-on-section-106-reforms/5109884.article

Affordable Housing: Construction – Parliamentary Written Answer

Lord Jones of Cheltenham: To ask Her Majesty's Government what plans they have to maintain the use of section 106 agreements to deliver affordable housing.

Lord Greenhalgh: The Government’s White Paper, Planning for the Future proposes that a new ‘Infrastructure Levy’ will replace section 106 planning obligations and the Community Infrastructure Levy and be set in a way which delivers at least as much - if not more - onsite affordable housing than at present. It also proposes that the Levy will be payable on the completion of development. To better support the timely delivery of infrastructure, local authorities would be allowed to borrow against Infrastructure Levy revenues so that they could forward fund infrastructure.

http://www.parliament.uk/business/publications/written-questions-answers-statements/written-question/Lords/2020-12-07/HL11139

Raising Of Section 106 Threshold To Be ‘Kept Under Review’

Appearing before the Housing, Communities and Local Government Select Committee, Christopher Pincher said he will review how plans to make sites of 40 or 50 homes exempt from Section 106 agreements would impact affordable housing provision. Section 106 agreements are agreed between developers and local authorities and usually involve the former either providing a certain proportion of affordable housing on site or an equivalent financial contribution. They were previously required on sites as small as 10 homes. Statistics released by the government show that Section 106 funded 52% of all affordable housing delivery in 2019/20, up from 49% the previous year. Read more on Inside Housing.

https://www.insidehousing.co.uk/news/raising-of-section-106-threshold-to-be-kept-under-review-says-pincher-68943?utm_source=Housing60&utm_medium=email&utm_content=article_link&utm_campaign=H60

All Section 106 Homes To Be Subject To New Shared Ownership Model

The government has said that it expects from April that all homes delivered with funding from Section 106 developer contributions will need to follow its new shared ownership model, which allows buyers to purchase smaller initial stakes in properties and staircase in 1% chunks. The new details came as part of a consultation opened by the government today calling for responses to its new shared ownership plan. This includes previously unseen details about how the plan will work, such as how shared owners can buy 1% stakes in their purchased homes, as well as protect new shared owners from hefty repairs bills for the first 10 years. Download the consultation from the GovUK website.

https://www.gov.uk/government/consultations/new-model-for-shared-ownership-technical-consultation?utm_source=480c7867-aaf7-4cb0-8a59-890a109d294b&utm_medium=email&utm_campaign=govuk-notifications&utm_content=daily 

Thousands Of Affordable Home Would Have Been Lost Under Planning Reforms

The LGA is warning that some councils could see an almost 50% reduction in affordable housing delivery. Under current rules, only sites of 10 homes or fewer are exempt from providing affordable housing through Section 106 agreements. However, in August the government announced plans to increase this threshold to 40 or 50 homes. Analysis by Glenigan found that between 2015/16 and 2019/20, 119,505 homes were delivered on sites between 10 and 49 units. This would have included 29,876 affordable homes through Section 106 agreements, based on current rules that require developers to deliver 25% affordable housing on sites of this size. Read more on the LGA website.

https://www.local.gov.uk/lga-thousands-affordable-home-would-have-been-lost-under-planning-reforms 

Research Highlights Slowdown In Delivery Of Section 106 Agreements

A report published by the MHCLG said that evidence points “to a discrepancy between what is agreed and what is delivered in practice”. More than half – 56% – of local planning authorities surveyed said that only 50% or less of the affordable housing promised by developers in 2016/17 had been delivered by 31 March 2019. “This is a change from the last iteration of the research and indicates a reduction in the proportion of affordable housing being delivered within a two-year period, suggesting either a slowing delivery of affordable housing or reduction in the proportion that will be delivered,” the report said. Read more on Inside Housing.

https://www.insidehousing.co.uk/news/government-commissioned-research-highlights-slowdown-in-delivery-of-section-106-agreements-67478

Tory Planning Reforms ‘Could Kill Off Affordable Housing’

 Government reforms of the planning system have been branded a “property developers’ charter” that will benefit Tory donors and could spell the end of affordable housing. The proposed reforms, announced last week, would see an end to section 106 agreements under which developers deliver affordable homes in exchange for permission to build. The government intends to replace the agreements – and another revenue generator, the community infrastructure levy – with a new levy it claims will increase revenue levels collected nationally when compared to the current system and ensure the delivery of more affordable housing. Read more on the Observer website.

https://www.theguardian.com/society/2020/aug/09/tory-planning-reforms-could-kill-off-affordable-housing

Housing: Construction – Parliamentary Written Answer

Mike Amesbury: To ask the Secretary of State for Housing, Communities and Local Government, what assessment has he made of the effect of the First Homes scheme on the level of Section 106 contributions to social and affordable (a) rent and (b) shared ownership.

Christopher Pincher: We have recently consulted on both the design of First Homes policy and options for its implementation. The consultation closed on 1 May and we are currently analysing the responses. As part of this we are considering the implications for other tenures. We will publish a response to the consultation in due course.

http://www.parliament.uk/business/publications/written-questions-answers-statements/written-question/Commons/2020-05-12/46154

Housing: Construction – Parliamentary Written Answer

Marco Longhi: To ask the Secretary of State for Housing, Communities and Local Government, what plans the Government has to strengthen the rights of local communities on section 106 agreements. 

Christopher Pincher: The Government has introduced a requirement for all local authorities that receive developer contributions, including from section 106 agreements, to publish an annual Infrastructure Funding Statement. The statements, which must first be published by 31 December 2020 should identify income and spend on infrastructure and affordable housing and the choices local authorities have made about how future contributions will be used. This transparency will help local people to understand what contributions are being collected towards infrastructure. The neighbourhood allocation of the Community Infrastructure Levy also enables communities to have a say in how funds should be used to help support their local area.

http://www.parliament.uk/business/publications/written-questions-answers-statements/written-question/Commons/2020-03-16/30036

Council Changes Section 106 And Stock Transfer Rules

A London council has agreed to remove Section 106 and stock transfer rules on a housing association-owned block that ensured it remained as over-50s accommodation only. Brent Council’s cabinet has decided to tweak restrictions on the John Barker Court development to allow Network Homes to let or sell homes at the site to people of all ages. A report to the cabinet claimed that the restrictions “are preventing the council from being able to nominate people on the waiting list who are in need of housing, regardless of their age”. Read more on Inside Housing.

https://www.insidehousing.co.uk/news/council-changes-section-106-and-stock-transfer-rules-at-former-sheltered-housing-block-64499

MP Demands Persimmon Pay £500K Before Massive Housing Project Begins

A developer is facing demands to pay half-a-million pounds owed to Redditch Council before starting work on a massive new estate. Persimmon Homes has submitted an outline application for 960 homes, including full permission 128 dwellings, in Brockhill East but the town's MP says the company still owes £521,000 to the borough council. The money is due as a condition of previous planning permissions to pay for public amenities and is referred to as Section 106 money. Read more on the Bromsgrove Advertiser website.

https://www.bromsgroveadvertiser.co.uk/news/17805560.mp-demands-persimmon-pay-500k-massive-housing-project-begins/

Developer Contributions To Be Made Simpler, Says Malthouse,

Housing minister Kit Malthouse has announced changes to developer contributions to make the system simpler and accelerate the pace of homebuilding. Builders pay through developer contributions (section 106 and Community Infrastructure Levy [CIL]) for the roads, schools, GP surgeries and parkland needed to help areas to cope with new residents. But Malthouse said these measures are “confusing and unnecessarily over-complicated”. The new rules mean that communities would know exactly how much developers are paying for infrastructure in their area, he explained. Councils will be required to report the deals done with developers and set how the money will be spent, so residents can see every step taken to make sure that their area is ready for new housing. Read more on the Planning Portal.

https://www.planningportal.co.uk/news/article/640/planning_news_-_13_june_2019?utm_source=PPQ+Newsletter&utm_campaign=3034f4b39f-Newsletter_18042019_HTML_COPY_01&utm_medium=email&utm_term=0_734e0b63a9-3034f4b39f-7266185#one

Housing Market Downturn ‘Could Cut Section 106 Affordable Housing Delivery In Half’

A market downturn similar to the one after the 2008 recession could see Section 106 delivery cut in half, a new report by housing consultancy Savills has warned. The report, titled Affordable Housing: Building Through Cycles, found that housing associations were increasingly exposed to market downturns, based on trends in housing delivery post-2008. Section 106 is a clause in planning legislation which requires developers to include a portion of affordable housing in their developments, which is then often sold to housing associations.It is a primary driver of affordable housing delivery – with 45% of housing association homes (14,437) developed using the mechanism in 2016/17. Read more on the Savills website.

https://www.savills.co.uk/research_articles/229130/271384-0

Regulator Was Warned About ‘Sham Transactions’ In 2015

The Regulator of Social Housing was warned about a housing association accused of using “sham transactions” to violate agreements to provide affordable housing in 2015. London District Housing Association (LDHA) was accused by Southwark Council in two court cases of “conspiring” to sell homes meant to be used as Section 106 affordable housing on the open market. The association signed Section 106 agreements agreeing to provide homes as shared ownership but then sold them as market sale while pretending they had been ‘staircased’ to 100% ownership on day one, the council alleged. Southwark Council took LDHA and several other organisations to the High Court in 2015 and 2016. Read more on Inside Housing.

https://webcache.googleusercontent.com/search?q=cache:JKJIs5lI9zwJ:https://www.insidehousing.co.uk/news/news/regulator-was-warned-about-sham-transactions-in-2015-56096+&cd=1&hl=en&ct=clnk&gl=uk&safe=vss

UK Affordable Housing Backed By World’s Largest Property Investor

New-York based private equity fund Blackstone is investing in Sage Housing Association to help the firm buy affordable housing allocations from developers. The funds will be used to allow Sage to buy private developers’ Section 106 allocations, affordable housing that developers can be required to deliver – on a large scale around the country. All properties will be for rent at Local Housing Allowance rates or lower, with Blackstone planning to give local authorities nomination rights. Sage was bought by residential investors Regis Group in 2017 and started buying Section 106 allocations of between five and 10 homes. They have won a third of their bids since then, according to the source. Read more on the buyassociation website.

Planning For The Right Homes In The Right Places

The Government has launched its consultation Planning for the right homes in the right places. This builds on some of the proposals in the Housing White Paper and seeks views on changes to national planning policy to help local planning authorities and communities plan for and deliver the homes they need, including:

·         A standard method for calculating local housing need

·         Improving how authorities work together to meet housing need

·         How the new approach to calculating housing need can help authorities plan for the needs of particular groups

·         Proposals for improving the use of section 106 agreements

Download the consultation form the CLG website.

Affordable Housing Squeezed By Land Values

The planning system has allowed soaring land values in London to reduce the amount of affordable housing delivered, research commissioned by London boroughs claims. Research reveals that since April 2009, although average London house prices have nearly doubled from £245,000 to £472,000, annual affordable housing delivery has dropped by 37%. The research, commissioned by a group of 13 Labour-led authorities and published on Friday, centres on the negotiations that take place between developers and local authorities when negotiating Section 106 agreements, which involves an examination of a scheme’s viability. The academics who produced the report recommended a “complete rethink” of the viability testing process in planning as a result. Read more on Inside Housing.

Two Further Councils Have No Section 106 Monitoring

Two London councils have admitted they have no process in place for ensuring developers provide the social housing that they promise to build. Bexley and Redbridge Councils both told Inside Housing that they have no monitoring process for their Section 106 agreements, a failure for which Southwark Council was censured by the Local Government Ombudsman in November last year. Through Section 106 of the Town and Country Planning Act, local authorities can add planning obligations to specific developments. It is often used to require developers to provide a certain percentage of affordable or social housing. Read more on Inside Housing.