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On 28th November 2014, the Department for Communities in Local Government released a written statement in order to support small scale developers, custom and self-builders. This written statement announced by the Minister of State for Housing and Planning (Brandon Lewis) that Section 106 obligations imposed on small scale developers for a provision of affordable housing is to be abolished and took almost immediate effect on 8th December 2014.
In essence, the Section 106 obligation is placed upon the developer to provide a percentage of affordable housing to meet local housing requirements which, in some circumstances, was so onerous that the development was no longer viable. This was recognised to be slowing up smaller scale developments, particularly in rural areas where the percentage of affordable housing was preventing further market housing coming on the market. This statement from the House of Commons is a giant leap in the right direction for rural development and the release of smaller sites which has, surprisingly, been created with very little press coverage.
In summary, there will no longer be a Section 106 obligation for housing development sites of less than ten units which have a maximum combined gross floor space of no more than 1,000m2. In certain designated rural areas, local planning authorities may choose to apply a lower threshold of five units or less. No affordable housing or tariff style contribution should then be sought from these developments. In addition, in a rural area where the lower five unit or less threshold is applied, affordable housing and tariff style contributions should be sought from developments of between six and ten units in the form of cash payments which are held until after the completion of units within the development. In addition to this, affordable housing contributions should not be sought from any development consisting only of the construction of a residential annex or extension to an existing home.
Although this may seem to be a minor change in the regulations as far as the land owner is concerned, it is of great importance to a housing developer when they are calculating the viability of a site and therefore, any small potential housing sites that have been dismissed in the past based on their viability, should be assessed once more. No longer are we in the position that one should dismiss a perfectly good development site on the edge of a village purely due to the fear that an affordable housing contribution would not make it viable and therefore never get it off the ground. This is also beneficial to those that are looking to convert extensive ranges of traditional buildings into multiple dwellings that would have previously had to reserve at least one unit under the affordable housing rules.
If you believe that you own a potential site that falls into this category and had previously dismissed it on the grounds of liability, then please do not hesitate to contact our planning and development team on 01748 829210 who can then discuss the site in further detail with our list of trusted house builders.