Housing and planning minister calls for councils to expedite affordable housing renegotiations

In a letter (2-page / 92 KB PDF) sent to local authority leaders this month, Lewis raised concerns that, following a government announcement that social rents will be reduced from 2016-17, schemes for the development of housing association properties "are not being built out at the anticipated rate".

The minister predicted developers would be approaching councils to renegotiate section 106 agreements in order to adjust the type of affordable housing to be provided. Lewis urged local authorities "to respond constructively, rapidly and positively to requests for such renegotiations and to take a pragmatic and proportionate approach to viability".

The minister said the "minimum amount of viability information necessary" should be sought where developers proposed a reduction in affordable housing contributions. He noted that developers are able to apply to the Planning Inspectorate for obligations to be altered on viability grounds and that delays in housing delivery risked councils being unable to demonstrate a five-year supply of deliverable housing land.

Lewis said proposals to change the mix of tenures provided without reducing the overall affordable housing contribution were unlikely to warrant new viability assessments. He also recommended that section 106 agreements should be drafted to allow for "the delivery of alternative forms of affordable housing if this becomes necessary".

Planning expert Abigail Webb of Pinsent Masons, the law firm behind Out-Law.com, said: "This plea from Brandon Lewis to local planning authorities reflects the commercial reality of development finance in that section 106 agreements have often been negotiated in differing economic conditions to those we face today. If the re-negotiation of affordable housing requirements is not available, this could result in stalled housing schemes whereby no development comes forward and councils will, as a result, be unable to evidence a deliverable five year housing land supply."

"There are concerns however that this pressure on councils to re-negotiate affordable housing provision could lead to a huge reduction in affordable housing delivery," said Webb. "The aim of councils should therefore be to re-negotiate tenure mix of affordable units without altering the overall affordable housing contribution." 

"Given the reduction in social rented housing and the possibility that starter homes will be included within the affordable housing 'mix' when the Housing and Planning Bill becomes law, it will be up to councils to decide what tenure mix is appropriate for the type of scheme being considered in their area, and to re-negotiate carefully with developers to ensure the correct tenure mix is provided," Webb said.