More than 200 landlords sign up to new Section 106 clearing service

A 2024 study from the Home Builders Federation found 17,400 affordable homes in England and Wales with planning permission that could not be built because housing associations did not have the financial capacity to bid for them.

Kate Henderson, chief executive of the National Housing Federation, said: “This clearing service is a welcome tool in tackling the current issue in the delivery of Section 106 affordable homes. 

“Building new relationships between developers and social housing providers is important in overcoming the immediate challenges, as well as helping developers to understand the requirements of housing associations in the future.

“Housing associations are facing significant competing financial pressures, which is also impacting their ability to both buy Section 106 homes and build other new affordable homes. In the longer term, housing associations are committed to working in partnership with the government on a long-term housing strategy to rebuild their capacity and deliver more much needed social and affordable homes.”

Some registered providers have stopped buying Section 106 homes due to the need to invest in fire safety and other improvements on their existing homes.

Larger housing associations are seeking to build more of their own homes in-house, known as ‘land-led’ development, while other landlords have said that some Section 106 homes on offer do not meet their requirements in terms of size, energy efficiency and build quality.

Adam Hug, housing spokesperson for the Local Government Association (LGA), said: “Councils urgently want to deliver more affordable housing, including those affordable homes agreed in Section 106 agreements with developers in local planning applications.

“This service is a positive step to promoting stalled sites to registered providers of affordable housing, and the LGA encourages all local authorities to engage with it. But it is just one tool which will help bring forward more affordable housing. Much more needs to be done.”

Registered providers are being joined by more than 70 house builders which have registered to provide details of affordable homes they have planning permission to build, alongside private homes, but have been unable to find a buyer for.

Ian Workman, chief customer officer at Homes England, said: “This is a relatively simple but potentially impactful service that means greater visibility of opportunities to get affordable homes sold and occupied. I would urge house builders in particular to register and add as much detail as they can.

“Listening, acting and working hand-in-glove with partners is fundamental if we are to move forward and find solutions together to the challenges the sector is facing. I am grateful to all those who have helped to shape this service so far, with promising early signs of uptake.”

It is hoped the service, created and managed by Homes England in response to sector feedback, will play its part in facilitating and accelerating the sale of uncontracted and unsold affordable homes across England.

Housing minister Matthew Pennycook said: “We recognise the challenge posed by the reduced appetite of registered providers of social housing to buy affordable homes delivered under Section 106 agreements.

“The new clearing service we have worked in partnership with Homes England to establish will help improve the functioning of the market and unblock the delivery of Section 106 affordable housing.

“Hundreds of developers and providers have already come forward to engage with this new service and real progress is being made as a result.”