The Government has announced that it will change planning policy to exempt developments of 10 homes or less from Section 106 planning obligations.

Department for Communities and Local Government_webThe Department for Communities and Local Government advised: “Due to the disproportionate burden of developer contributions on small scale developers, for sites of 10-units or less, and which have a maximum combined gross floor space of 1000 square metres, affordable housing and tariff style contributions should not be sought. This will also apply to all residential annexes and extensions.”

Where sites fall with rural areas under section 157 of the Housing Act 1985, such as National Parks and Areas of Outstanding Natural Beauty, this threshold can change to 5 units or less. “Within these designated areas, if the 5-unit threshold is implemented then payment of affordable housing and tariff style contributions on developments of between 6 to 10 units should also be sought as a cash payment only and be commuted until after completion of units within the development.”

These changes are a positive step to encourage small scale development which may have otherwise been unviable due to Section 106 planning obligations.  Not only does this policy change aid the ever growing housing shortage currently faced by the UK, it also aids small and medium sized builders who provide valuable jobs within the building industry.

In a recent Government Press release Eric Pickles said ‘Small builders are being hammered by charges, which have undermined the building industry, cut jobs and forced up the cost of housing. By getting rid of these 5 and 6-figure charges, we will build more homes and help provide more low-cost and market housing.’

Click here to read the full Department for Communities and Local Government Planning Contributions (Section 106 planning obligations) – Government response to consultation.

If you wish to discuss how this might affect your land or development opportunities please contact Katherine Gray on 01252 762007 or katherineg@mackenziesmith.co.uk.