Jamie Hailstone 07 August 2017

Section 106 pricing developers out of market, research warns

Costly Section 106 agreements are pricing some developers out of the market, according to the peer-to-peer lending website Lendy.

The website claimed developers were forced to pay £2.1bn to local authorities last year via Section 106 agreements in order to grant planning applications, compared to £1.7bn five years ago.

It added developers will often be asked to make a lump-sum payment to the local authority without any clear indication on how the money will be spent and some agreements can reach up to £10m or more.

‘It’s no secret that there is a housing shortage in the UK,’ said Lendy co-founder, Liam Brooke. ‘More needs to be done to help support developers – allowing them to get spades in the ground and houses built.

‘Agreements with local authorities for planning permissions can be both complex and costly for developers.

‘You can argue that Section 106 agreements can be beneficial in ensuring the local community benefits from developments, however, the fact that smaller developers are being priced out of the market by these added costs is a real concern.

‘For smaller developers who are already struggling to find funding for their developments, these added costs can be the final nail in the coffin,’ added Mr Brooke.

‘If developers are faced with high costs from local authorities they may need to recoup some of their profits which could mean higher house prices or corners being cut during construction.’

SIGN UP
For your free daily news bulletin
Highways jobs

Makaton Tutor - Part Time / Term Time

Essex County Council
£25821.00 - £30377.00 per annum + + Pension
Makaton Tutor - Part Time / Term TimePermanent, Part Time£30,377 per annum, full time equivalent / equal to £15.74 per hour.Location
Recuriter: Essex County Council

Assistant Urban Design Intern

Essex County Council
Up to £25081.00 per annum + + 26 Days Leave & Local Gov Pension
Assistant Urban Design InternFixed Term, Full Time£25,081 per annumLocation
Recuriter: Essex County Council

Wellbeing and Independence Practitioner - Safeguarding Team

Essex County Council
£31931.00 - £36423.00 per annum + + 26 Days Leave & Local Gov Pension
Wellbeing and Independence Practitioner - ASC Centralised Safeguarding TeamFixed Term, Full Time£31,931 to £36,423 per annumLocation
Recuriter: Essex County Council

Financial Strategy Manager (Revenue)

The Royal Borough of Kensington & Chelsea Council
Negotiable
Bring clarity to complex decisions and help shape how we invest in our borough's future.Bring clarity to complex decisions and help shape how we inves England, London
Recuriter: The Royal Borough of Kensington & Chelsea Council

Team Manager - Locality

Wakefield Council
£55,979.00, Grade 13
Wakefield Children’s Services have been rated by Ofsted as GOOD with outstanding leadership. Wakefield, West Yorkshire
Recuriter: Wakefield Council
Linkedin Banner