Section 106 – how does this impact developers?
With UK property buyer demand increasing 26% in the month of December 2019 in comparison to the previous year’s statistics, the number of new homes build across the nation are bound to follow.
As part of this, the social impact of such developments will undoubtedly be felt on infrastructure and communities. Local services, more cars on the roads as well as demand for schooling and resources in chosen areas will all put a strain on local communities. This is where Section 106 of the Town and Country Planning Act 1990 comes into play.
What is section 106?
A Section 106 agreement is a contract between a builder and local government, designed to offset the social impact of new build properties on the surrounding area. This makes planning proposals acceptable on the basis that developers mitigate the impact of the development on the local area.
Commonly, this can involve provision of affordable housing as a proportion of the development and the infrastructure for this affordable housing. However, this can also include:
- Provision of parks and green spaces
- Provision of roads or other infrastructure
- Contribution to local institutions such as schools and Doctors’ surgeries.
Who does it affect?
Developers and Housebuilders:
Primarily, as the developer of residential units you will be responsible for maintaining and improving the welfare of the local area while developing. This will be an agreement between the developer and local planning authority and will usually be satisfied in one of the above ways.
Homeowners and buyers:
As the homeowner or buyer, Section 106 can impact you and the local area. Access to green spaces, affordable housing and suitable infrastructure can all improve quality of life.
As a resident of the local area, improvements made to infrastructure and green spaces bring many advantages. More Amenities, Improved quality of life as well as improved house value to name a few.