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Briefings

Member Briefing: Applications to amend affordable housing contributions on grounds of viability to end on 30th April 2016

Date: 04/04/16

Applications to amend affordable housing contributions on grounds of viability to end on 30th April 2016

Ministers have indicated that they are not going to extend the temporary provisions currently available to developers to formally apply to amend S106 agreements with regard to affordable housing contributions on the grounds of scheme viability. The relevant clauses Section 106BA, 106BB and 106BC allowing such applications will come to an end on 30th April 2016.

Background

The provisions, introduced by the Growth and Infrastructure Act 2013, introduced new Sections 106BA, 106BB and 106BC to the Town and Country Planning Act 1990. This allowed an application to be submitted to a local planning authority to modify or completely remove a previously agreed planning obligation to provide an element of affordable housing. The grounds for such applications were solely that the requirement would make the development economically unviable and the local planning authority was charged with determining the application solely on the basis of making the development viable. Thus the affordable housing requirement could be reduced or removed. Section 106BC allowed appeals to be made to the Secretary of State where the LPA refused applications to modify the planning obligation.

Section 7(4) of the Growth and Infrastructure Act stated that Sections 106BA, BB and BC were a temporary measure and that these Sections would be repealed at the end of 30th April 2016 unless the SoS extended the date using S7(5) of the Act. Despite the fact that, in last November’s Autumn Statement and Spending Review, it was announced that the government would “extend the ability to appeal against unviable section 106 agreements to 2018" it is now understood that the SoS does not intend to change the date of 30th April 2016.

However, it is believed that transitional arrangements under S7(6) of the Infrastructure Act 2013 will be set out and applications that are submitted before the end of 30th April 2016 will still have to be determined by the local planning authority and any such applications that are refused after the cut-off date will retain the right of appeal under S106BC.

Comment

HBF had been discussing with government the possibility of an extension to these provisions and the announcement in the Autumn Statement was welcomed. However, government has recently come under considerable pressure from both local authorities and affordable housing providers over other amendments to affordable housing policy, particularly the introduction of starter homes and the potential for sites of less than 10 dwellings possibly becoming exempt from such provisions.

There have been very few formal applications using these provisions and, although HBF has made it clear that the fact that there are formal procedures in place makes local authorities more likely to renegotiate agreements on an informal basis, the government believes that, in the current rising market, it is unlikely that extant permissions will currently be unviable.

Members are, therefore, advised to submit any applications under S106BA before the cut-off date of 30 April 2016. 

Andrew Whitaker

HBF Planning Director