Government allows developers to appeal "commercially unviable" section 106 agreements

Section 106 of the Town and Country Planning Act enables local authorities make planning permission conditional on developers providing community amenities when building developments.

Prime Minister David Cameron and Deputy Prime Minister Nick Clegg said that they will remove restrictions on house builders to help restart building on 75,000 homes that have stalled due to sites being commercially unviable.  

The announcement includes other measures aimed at "supporting businesses, developers and first-time buyers, while slashing unnecessary red tape across the planning system", the Government said.

The Government recently announced a consultation which proposed to allow developers to renegotiate section 106 agreements with councils if the agreement was signed before April 2010 and the development was commercially unviable.

Under the proposals announced by the Government today if developers can prove that it is the council's proposed affordable housing requirements that have made a scheme commercially unviable and negotiations with the local planning authority have failed, developers will be able to appeal the decision.

"Big" commercial and residential applications will be directed to a "major infrastructure fast track" planning route, the Government said in its announcement. This will include "thousands" of schemes being considered by the Planning Inspectorate. This route will also be available to developers where an application is being considered by a "poor" council.

If town hall planning departments are considered to be "poorly performing", developers will be able to "bypass councils" and more applications will go into a "fast track appeal process", the Government said. The worst councils will be put under "special measures", which will include those that have failed to improve the speed and quality of their work.

Other announcements include a commitment by the Government to introduce new legislation for Government guarantees of up to £40 billion worth of major infrastructure projects and up to £10bn worth of new homes. The 'Infrastructure (Financial Assistance) Bill' will include guaranteeing the debt of Housing Associations and private sector developers, the Government said.

An additional £300 million of capital funding has also been announced, which will be used alongside the infrastructure guarantee scheme to build up to 15,000 affordable homes and bring 5,000 empty homes back into use. A further 5,000 new homes are planned to be built for rent at market rates, in line with proposals outlined in Sir Adrian Montague’s report to Government, which examined ways to boost the private rented sector.

The Government has pledged £280m of funding to extend the Government's "FirstBuy" scheme, which aims to help first time buyers with a deposit. It is hoped this could help 16,500 people buy a home.

For a limited time, the Government has also announced that it will "slash red tape" and "sweep away the rules and bureaucracy" that prevent families and businesses from making improvements to their properties.

Property law expert David Meecham of Pinsent Masons, the law firm behind Out-Law.com, said: "the relaxation of affordable housing requirements together with the extension of the existing low cost home ownership products and the promotion of the private rented sector might be seen as a way of supporting the housing market, but could potentially be doing so to the detriment of the provision of much needed affordable housing."

“Some of the proposals are controversial; others have been a long time in coming," said Cameron. "But along with our Housing Strategy, they provide a comprehensive plan to unleash one of the biggest homebuilding programmes this country has seen in a generation."

“Today’s major boost to housing and planning will make it easier to build a home, easier to buy a first home and easier to extend a home," said Clegg.