Unlocking Affordable Housing

The Case for S106 Reform

Last week the MHCLG issued a statement on how the Government intends to apply some flexibility to S106 agreements, including affordable housing.

The following article looks at the policy roadmap which sets out immediate temporary measures to unblock stalled sites, alongside long‑term reforms to create a simpler, more transparent and more resilient S106 system.

1. Immediate Action: Unlocking Legacy Uncontracted S106 Homes

Thousands of S106 units across England are built or consented but remain uncontracted, with developers unable to secure Registered Provider (RP) buyers. This creates stalled development sites and bottlenecks in the wider housing pipeline.

To address this, the Government expects Local Planning Authorities (LPAs) to use existing flexibilities to renegotiate S106 agreements where developers can prove they have made reasonable efforts to find a buyer.

Conditions LPAs must consider

LPAs should reopen negotiations when all of the following apply:

Developers have exhausted all reasonable endeavours to secure an RP buyer as per the original S106 requirements;
Any uncontracted S106 homes have been uploaded to the Homes England Clearing Service by 1 June 2026;
Homes must remain listed on the Clearing Service for six weeks;
Units must be due to complete by 1 December 2027;
LPAs should avoid renegotiating where reasonable RP offers have already been made; and
Developers must disclose all bids received; LPAs should take a pragmatic, light‑touch approach to assessing reasonableness.

Where disputes arise, parties may use existing Alternative Dispute Resolution routes.

Approach to Deeds of Variation

If conditions are met, LPAs are encouraged to:

Seek alternative affordable or discounted market tenures first;
If no RP buyer emerges, allow a shift to private market rent or sale, ideally with replacement affordable housing off‑site or via financial contributions;
Include clauses reverting tenure to the original agreement if homes are not completed by December 2027.

This intervention is strictly time‑limited and intended only to address current backlogs.

2. Strengthening and Supporting S106 Negotiations

Long‑term reform begins at the plan‑making stage. The proposed new National Planning Policy Framework (NPPF) places greater emphasis on establishing viability and affordable housing expectations upfront.

Planned measures include:

Clearer rules on when site‑specific viability assessments are permissible;
Stronger pre‑application engagement to reduce negotiation delays; and
Publication of a standardised S106 template for medium sites (under 50 units), developed by Town Legal LLP, to streamline drafting and speed up agreements.

3. Setting Clear Expectations for S106 Delivery

To ensure future S106 homes meet RP requirements and reduce disputes, the Government will issue new guidance covering:

Clear, proportionate build and design standards for S106 homes;
A framework for improved collaboration between LPAs, developers and RPs, particularly at the planning application stage;
Greater transparency and consistency in S106 pricing, including learning from LPAs already publishing transfer rates; and
Support for smaller housing providers to participate more effectively in S106 delivery.

This guidance will be published before the emergency intervention closes, helping prevent future build‑up of unsold S106 units.

4. Expanding Financial Capacity to Support S106 Delivery

The Government is seeking to implement several financial measures to revive confidence and investment in the S106 market, including:

Low‑interest loans to Private Registered Providers via the National Housing Bank and GLA (10% of the £2.5bn programme available for S106 delivery);
Reforms allowing Councils to use Right to Buy receipts and Local Authority Housing Fund allocations to purchase S106 units;
Exploration of consortia buying models for RPs to pool capacity;
Work to attract additional private investment, including potential government‑guaranteed acquisition vehicles for unsold S106 units; and
Proposed expansion of the affordable housing definition to include military affordable housing.

Conclusion

The MHCLG's roadmap outlines an ambitious, two‑pronged approach:

Immediate, temporary measures to unlock currently stalled S106 units and keep housing delivery on track; and
Structural long‑term reform to make S106 agreements simpler, more transparent and more resilient.

The Government emphasises that S106s will continue to play a vital role in delivering social and affordable housing. All parties—LPAs, developers, RPs and wider partners—are expected to collaborate fully to ensure the system supports the country’s housing needs now and in the future. In the meantime, the Government have said they will be tracking S106 delivery over the coming months and will issue an update accordingly.

Author

Laura Jackson MA
Associate Director

Laura joined DHA in 2004 as part of our original Graduate intake. She holds a Bachelor of Science (Hons) Degree in Geography and Sports Science from Loughborough University, and an MA in Urban and Regional Planning at the University of Westminster. She is also a member of the RTPI.