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.’

What’s happening inside the LGPS? image

What’s happening inside the LGPS?

Get the most informed take on the challenges and opportunities that substantial reform will bring at this year’s PLSA Local Authority Conference.
SIGN UP
For your free daily news bulletin
Highways jobs

Senior Project Manager (Regeneration)

West Yorkshire Combined Authority
£49,359 to £56,057 per annum (pay award pending) – Grade 9
With ambitious goals ahead, we need dedicated individuals who are ready to make a real impact as part of our expanding Housing team Leeds / Hybrid
Recuriter: West Yorkshire Combined Authority

Information Governance Officer

Essex County Council
£28349.00 - £33351.00 per annum + pension
Information Governance OfficerPermanent, Full Time£28,349 to £33,351 per annumLocation
Recuriter: Essex County Council

Information Governance Officer

Essex County Council
£28349.00 - £33351.00 per annum + pension
Information Governance OfficerFixed Term, Full Time£28,349 to £33,351 per annumLocation
Recuriter: Essex County Council

HR Advisor - Pay & Policy (Career Grade)

Wakefield Council
Grade 9 - Grade 10, Career Grade, 24 hours, Permanent
Are you ready to make a difference and shape policies that foster a high performing and inclusive workplace? Wakefield, West Yorkshire
Recuriter: Wakefield Council

Leisure Support Assistant

Wakefield Council
£12,013.50 - £12,202.00, Grade 3, 18.5 hours, Permanent
Are You Ready to Make a Difference in Your Community? Wakefield, West Yorkshire
Recuriter: Wakefield Council
Linkedin Banner