Moves by the Government to make the planning system less cumbersome for small scale developers and landowners is to be welcomed by the property industry, says Jack Tavernor of Strutt & Parker’s Shrewsbury office.

What was promised?

Brandon Lewis, Minister of State for Housing and Planning, announced additional measures to free up the burdensome planning system to support small scale developers and self-builders by removing additional contributions like Section 106 (S106) agreements.

Mr Lewis says that contributions like the S106 agreements should not be sought from small-scale developers for sites of 10 units or less and which have a maximum combined gross floor space of 1,000 square metres.

An S106 obligation can:

• Limit the development or use of the land in any specified way;
• Require specified operations or activities to be carried out in, on, under or over the land;
• Require the land to be used in any specified way; or
• Require a sum or sums to be paid to the authority on a specified date or dates or periodically.

The problem is that such obligations can amount to tens of thousands of pounds of additional costs and are often considered to bring the viability of sites into question. On average, S106 adds an additional £15,000 to the cost of building each house.

For landowners or those wishing to build their own homes, and indeed those people looking for housing in rural areas, the proposed removal of the additional contributions is very much a positive move as it will give a boost to small- and medium-sized house builders and generate market growth.

What the new measures will do?

Mr Lewis says that by lowering the construction cost of small-scale new build housing and home improvements, the reforms will:

• Increase housing supply and encourage development on smaller brownfield sites;
• Complement recent changes to planning law allowing the conversion of agricultural buildings to residential use via permitted development rights and the exemption from Community Infrastructure Levy for self-builders and community led projects; and
• Encourage development of smaller sites, so creating more opportunities for those people wishing to purchase property in these rural areas.

Any downsides?

While many in the house building industry have welcomed the plans, the reforms are seen as a double edge sword by many, especially those waiting for social housing in rural areas. 

Rachel Fisher, head of policy at the National Housebuilding Federation said that any measure which reduces the number of new affordable homes being built is fundamentally wrong.

Removing the Affordable Housing Contribution could mean less affordable houses being built with developers choosing to build fewer numbers of houses on smaller sites.