CIH also says off-site affordable housing should be in “exceptional circumstances”
The Chartered Institute of Housing (CIH) has welcomed the government’s proposal to improve and speed up the section 106 process through the use of standard templates on medium-sized sites, but has stressed local planning authorities will still require flexibility.
The CIH in its response to a government consultation, said: “Local authorities must be provided with the flexibility required to shape S106 agreements to meet their area’s needs, according to the local plan.
“This can be achieved within a standardised template, but the template should not be too prescriptive or take a ‘one size fits all’ approach. It should allow for flexibility when required, particularly for rural areas which may require specific approaches to meet acute rural housing needs.”
Demand for section 106 homes has faltered in recent years, with many housebuilders reporting it has become more difficult to forward-sell affordable homes required under planning consents to housing associations. CIH’s UK Housing Review earlier this year highlighted the share of affordable homes delivered by section 106 dropped to 36% in 2024/25 compared to 45% the previous year.
The proposed standard template would apply to schemes of up to 2.5 hectares in area and between 10 and 49 homes.
CIH said the cascade process – under which developers can make a payment in-lieu of affordable housing – should only be used in “exceptional circumstances” or as “a last resort” and must be at the local planning authority’s (LPA) discretion.
It also said unspent developer contributions should be ringfenced to support affordable housing delivery by the local strategic authority or Homes England. It said there should be a greater expectation within the template that developers, local authorities and housing providers should engage with the government’s endorsed National Section 106 affordable housing engagement guidance, and that should sit alongside the standardised template.
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