Residential developments: new section 106 delivery roadmap

On the grant of planning consent for a new residential development, a local planning authority (LPA) will usually require the parties to enter into an associated section 106 agreement which will typically include obligations to provide affordable housing within the scheme and, before the commencement of development or occupation of any new homes, to sell that affordable housing to a registered provider (RP).

However, due to a lack of interested RP purchasers, schemes are stalling and housing is being left unoccupied. Research published by the Home Builders Federation in October 2025 showed that 8,500 section 106 affordable units remained unsold due to an absence of RP purchasers.

This will not come as a surprise to the sector. Such is the problem that the government tasked Homes England in December 2024 to create a database – known as the section 106 clearing service – containing ‘details of housebuilders’ uncontracted and unsold s.106 affordable homes across England’. The intention is that housebuilders, RPs and LPAs will register to access the database and take up opportunities detailed within it.

What is the government’s new plan?

Section 106 delivery roadmap

The government is stepping in again and, in addition to the section 106 clearing service, it has produced a roadmap, which:

• establishes a new time-limited approach to section 106 affordable units, where the housebuilder can demonstrate that no RP is willing to buy them;
• requires all such section 106 units to be registered on the clearing service;
• encourages standardisation across the market in respect of how pricing is negotiated, so as to provide more certainty for RPs and housebuilders on what they can expect to pay and accept for section 106 affordable units;
• expands financial capacity to revive RP demand for section 106 units; and, perhaps most importantly
• allows for a change of tenure if all of the above fails to create the necessary demand.

The roadmap is intended to be a short term measure to reinvigorate the market for section 106 affordable units.

The roadmap reminds LPAs that they:

• already have the ability to renegotiate section 106 agreements, to vary the number and/or tenure of social and affordable units to be delivered; and
• can include ‘cascade’ mechanisms in section 106 agreements – for example, allowing a housebuilder to change the tenure of affordable units where it cannot find an interested RP purchaser within a specified period of time, without the need for a deed of variation (DoV) – but these appear to have fallen out of use because LPAs are concerned about loss of control.

In light of LPA reluctance, the roadmap makes it clear that LPAs are expected to consider renegotiating section 106 agreements when the following conditions are met:

• the housebuilder has exhausted all reasonable endeavours to find an RP purchaser;
• the housebuilder has uploaded uncontracted affordable units onto the section 106 clearing service by 1 June 2026;
• the affordable units have been live on the section 106 clearing service for at least six weeks;
• the affordable units are due for completion on or before 1 December 2027.

Where the aforementioned six week period has elapsed:

• LPAs should confirm their decision on any DoV to the relevant section 106 agreement no more than 12 weeks after that six week period has ended;
• where the decision is reached to proceed with a DoV, initially LPAs should encourage alternative affordable housing or discounted market tenures within the scheme;
• if there is no buyer for such alternative tenures, LPAs should proceed with private market rent or sale. Here, rather cryptically, the government suggests the housebuilder should provide the equivalent affordable housing off-site within the LPA’s area or a financial payment in lieu;
• LPAs should stipulate that if the relevant section 106 affordable units are not practically completed on time, and in any event by 1 December 2027, schemes will revert to the original tenure mix (presumably housebuilders will be allowed the usual extensions of time for reasons beyond their control?); and
• in relation to phased developments, where a phase is not expected to be completed by 1 December 2027, the original section tenure mix should not be varied.

LPAs are expected to avoid tenure renegotiations where reasonable offers have been received from willing and suitable RPs – it is not clear what this will mean in practice.

On their part, housebuilders will be expected to disclose to the LPAs any and all bids they have received from interested RPs.

These bids will need to be assessed for reasonableness by the relevant LPAs and the roadmap encourages them to consider ‘site level viability evidence; published commuted sums policies; grant rates; surveyor data; and recent S106 purchases in the locality’. Where housebuilders and LPAs cannot reach an agreement on the reasonableness of an RP’s bid, the government expects the parties to seek third party views or an alternative dispute resolution.

Standardised section 106 agreements

The government has made clear in the National Planning Policy Framework (NPPF) that it believes local plans should clearly set out the contributions expected from developers, and the amount of affordable housing and infrastructure needed in the local area.

In addition, the government has set out its proposals on how section 106 agreements should be drafted.

In response to research which showed the average agreement approval timeline in 2024/25 was 515 days – with that period getting longer – Town Legal LLP was appointed to draft a standardised section 106 agreement template for use on small to medium schemes (below 50 units) within England.

Town Legal LLP assembled a working group of private and public sector solicitors, planners, advisers and stakeholders across the sector. The group created the first draft of this template, which was published in November 2025. It is intended to assist LPAs that do not have an existing template – the draft does permit local variations.

Conclusion

The government hopes its roadmap will secure the delivery of much needed affordable housing. If units cannot be used for affordable housing, they will be made available on the open market.

Further guidance on the proposed standardisation of the section 106 process is expected shortly, with the stated aim of reducing the administrative burden on local planning authorities and creating a more efficient pathway for bringing affordable homes forward.

We anticipate additional detail in the coming months as the government refines its proposals. We will continue to monitor developments closely and keep you updated as further guidance is published.

Mark Sellers is a Partner and Charlotte Benson-Goring is a Senior Associate at Penningtons Manches Cooper.