Section 106 Affordable housing Commuted Sums - Public forum - Planning Advisory Service (PAS)
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Section 106 Affordable housing Commuted Sums
Does anyone have any examples of completed self build properties in rural villages, where commuted sums have been paid to LAs, to release the owner/builder from an affordable S106 agrrement? for example the permission was granted, on the condition of signing a S106 affordability agreement, with 50% discount resale conditions and locall ocupancy clauses. I turns out that the build cost far more than had been expected, and lenders will not touch the property due to risk of conditions, the owner can not borrow against his equity for purposes such as buissines, and is affecting his life dramatically. It has been suggested a mechanisum is in place to allow a commuted sum payment to release the builder/owner from the agreement. This case is in gwynedd, North Wales, but examples and opinions from accross the U.K will be welcomed and are needed. Many Thanks
Your question states that is was a condition of the planning permission to sign a Sec 106 Agreement, it was my understanding that Section 106 agreements cannot be conditioned, accordingly you may whish to investigate the validity of the condition see Circ 11/95 and the guidance on Section 106 agreements If the condition is not valid it could possibly be argued that the houses could be sold at full market price.
In Gwynedd and the SNPA they always say consent for a dwelling under affordable home policies is subject to a Section 106 being signed which ensures that the dwelling is affordable in perpetuity, this is not a planning condition per se. I was always under the impression that the S106 should be part of the application itself, a negotiated agreement rather than the blanket imposition we have the misfortune to be burdened with. Lenders will not accept these S106 which means that when the dwelling has been finished using brifging finance the owners are trapped in an expensive short term loan and the banks want them off their books, but there are no sources for a remortgage.
Anglesey have adopted a new Sec. 106 agreement where there is a standard discount on affordable units (30% for standard AH, and I think 20% for self build AH). However, when the owner wishes to sell they must have the property value to give an appropriate value with discount, then offer for sale at the price with the restriction. If they are unable to find a buyer then they must notify the Council, who then have a limited period in which they can nominate a suitable buyer (someone in housing need from the Housing Register). If the Council is unable to find a buyer then the owner is able to sell at full open market price, with 30/20% of the value to be returned to the Council to use for AH purposes, with the agreement then discharged. I believe that they are allowing those with existing agreements to move to this new S.106 (through deed of variation) as they recognise that the old style agreements were preventing owners from obtaining finance It may be worth contacting the Affodable Housing team at Anglesey to discuss their sucess with this approach.
Thanks Jamie, I did that. Unfortunately rumours suggest that Anglesey County Council, including the open minded planners, will be merged with the distinctly myopic Gwynedd County Council. I hope the WAG Minister takes a deep breath before ordering such a merger.
My understanding is similar to that of the Senior Planner from Norfolk County Council. Section 106 agreements cannot be conditioned, if the owner gets a good planning solicitor the conditioned would be challenged. This goes back to an appeal decision back in May 2008.
Sulina, Many Thanks for your input, please can you explain further, and also let me know where to find the apeal details. Your help is appreciated.
URGENT... Does anyone have any examples of completed self build properties in rural villages, where commuted sums have been paid to LAs, to release the owner/builder from an affordable S106 agrrement? for example the permission was granted, on the condition of signing a S106 affordability agreement, with 50% discount resale conditions and locall ocupancy clauses. I turns out that the build cost far more than had been expected, and lenders will not touch the property due to risk of conditions, the owner can not borrow against his equity for purposes such as buissines, and is affecting his life dramatically. It has been suggested a mechanisum is in place to allow a commuted sum payment to release the builder/owner from the agreement. This case is in gwynedd, North Wales, but examples and opinions from accross the U.K will be welcomed and are needed. Many Thanks neville williams Manager NWs106