S106 update: Exemption held for development sites with 10 or less units

The Court of Appeal ruling on the exemption of small residential sites (10 homes or fewer) from affordable homes obligations has been published on Monday 16th May 2016. 

Reading Borough Council and West Berkshire District Council quashed this Government policy, through winning a High Court ruling in July 2015.

However, today the government has won the legal challenge in the Court of Appeal. Consequently the Planning Policy Guidance text has been reinstated.

No affordable housing provision or contribution is therefore required for small scale developments, incorporating schemes of 10 or less units (five dwellings in designated rural areas), or a maximum gross floor space of 1,000 sq m. CIL contributions will still be required for these proposals where CIL has been adopted.


Definition from York University

Section 106 (S106) of the Town and Country Planning Act 1990 allows a local planning authority (LPA) to enter into a legally-binding agreement or planning obligation, with a land developer over a related issue. The obligation is sometimes termed as a ‘Section 106 Agreement’.

Such agreements can cover almost any relevant issue and can include sums of money. Possible examples of S106 agreements could be:

• The developer will transfer ownership of an area of woodland to a LPA with a suitable fee to cover its future maintenance

• The local authority will restrict the development of an area of land, or permit only specified operations to be carried out on it in the future e.g., amenity use

• The developer will plant a specified number of trees and maintain them for a number of years

• The developer will create a nature reserve

S106 agreements can act as a main instrument for placing restrictions on the developers, often requiring them to minimise the impact on the local community and to carry out tasks, which will provide community benefits.

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