Research article

Renegotiating Section 106 Agreements

Local Authorities have been advised by the Government to renegotiate Section 106 Agreements that would otherwise prove a hindrance to developments.

Alongside the NPPF, a series of house building funding initiatives have been announced by Government, including Get Britain Building. More recently, the Government announced a £474 million infrastructure fund specially targeted at larger strategic sites (1,500+ dwellings). The Government has also re-affirmed advice to LAs to renegotiate existing Section 106 Agreements where these prove a hindrance to development.

The Growth and Infrastructure Bill additionally provides for a three year period to April 2016 during which an application may be made to a LA to amend the affordable housing level, with an appeal process for where an applicant feels the decision of the LA is unsubstantiated.

Section 106 Renegotiation: Case Study

Crest Nicholson, Daventry, 1,000 dwellings at ‘Monksmoor Farm’

Savills achieved a positive resolution from Daventry District Council to amend the Section 106 Agreement (Deed of Modification) following negotiation over payment triggers, amounts and affordable housing levels based on a viability appraisal submitted by Crest Nicholson. The team was able to demonstrate that, at present values and costs, the scheme produced a negative land value and could in fact deliver no affordable housing. In order to achieve greater long-term certainty for all parties, 20% affordable was agreed (reduced from 35%). All parties showed willingness to see the scheme delivered. Phase 1 reserved matters are now submitted, with the first dwellings due to be delivered Summer 2013.

It is demonstrated from this that:

• Post-NPPF, 30 significant appeals have been allowed, nine of which are substantial, comprising over 500 dwellings.

• All Inspectors’ recommendations for approval have been endorsed by the Secretary of State.

• A total of 11,669 dwellings were granted via appeal, of which 10,054 were via the Secretary of State (87%).

• Only 12 significant residential proposals (4,175 dwellings) have been dismissed at appeal, which represents only 26% of the total.

Before the introduction of the NPPF it was more difficult to get planning consent for a significant development via the appeal process. Planning Inspectors are undoubtedly embracing the NPPF positively, and setting an example to other planning decision-makers in the process.

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