There have been a number of announcements concerning Section 106 planning obligations in the last few weeks. Last week’s Autumn Statement and the National Infrastructure Plan 2014 confirmed Government plans to speed up Section 106 negotiations by:
- issuing revised guidance
- consulting on a faster process for reaching agreement
- considering how timescales for agreement could be introduced
- improving transparency on the use of Section 106 funds.
NEW THRESHOLD FOR SECTION 106 PLANNING OBLIGATIONS
Perhaps of more interest, however, was the Government’s response to its consultation on Section 106 planning obligations (issued on the 28 November 2014). This confirms the introduction of a threshold beneath which affordable housing contributions and tariff style contributions should not be sought.
Section 106 planning obligations will not be sought for:
- developments of 10 units or fewer (including self-build) which have a maximum combined gross floor space of no more than 1,000 square metres
- developments of five units or fewer in designated rural areas where the local planning authority chooses to implement this lower threshold. Note that a maximum floor space limit does not apply to the five unit threshold
- any development consisting only of the construction of a residential annex or extension to an existing home.
For developments of 6-10 units in designated rural areas where the five unit threshold is implemented, payment of Section 106 planning contributions will be sought in cash (rather than in kind) and will be deferred until after completion of the units within the development.
Note that the changes will not apply to Rural Exception Sites. Subject to the local area demonstrating sufficient need, Section 106 planning obligations will still be available in relation to small developments.
SOME PLANNING OBLIGATIONS MAY STILL APPLY TO SMALL SCALE DEVELOPMENTS
Also note that some planning obligations may still be required to make a development acceptable in planning terms. Even where the new threshold applies, planning authorities will still be able to seek obligations for site specific infrastructure (eg road access improvements or the provision of adequate street lighting) where this is required to make a site acceptable in planning terms.
The Government hopes that the changes will “strike an effective balance between providing the support and incentives which will drive up self-build, small scale and brownfield development without adversely impacting on local contributions to affordable homes and infrastructure”.
Commenting on the Government’s response, Linda Storey, social housing partner at Penningtons Manches, said: “While support for small builders and developers is important, the proposals raise further concerns regarding the future supply of affordable housing in rural areas”.
For guidance on planning obligations (including guidance on the changes) click here.