Small Sites Verdict
Self-Builders are set to save £1,000s thanks to a recent decision on Section 106 Planning Obligations. On 11 May the Court of Appeal Civil Division reversed last year’s High Court decision to quash the exemption from s106 planning obligation payments for small sites.
Self-Builders Freed from §106
In 2014 a Statement by the Minister for Housing and Planning, Brandon Lewis MP, freed Self-Builders from the unpopular §106 planning obligation payments requiring them to divert £10,000s from their new home budge into a payment towards roads, schools, affordable housing and other local authority infrastructure projects.
The National Custom and Self Build Association (NaCSBA) had campaigned for the exemption on the grounds that the payments – designed to mitigate the impact of major development on local infrastructure – were disproportionate to the impact of small developments, especially single Self-Build homes and failed to recognize the exceptional costs of developing a small site.
10 Home Site Exemption
The exemption, applied to sites in England of 10 new homes or less (five in designated rural areas), was welcomed by Self Builders and small housebuilders. Some local authorities, however, disagreed with the exemption and, contradicting Government intentions, on 31 July 2015, the judge in a High Court case brought by two neighbouring authorities, Reading and West Berkshire, found the exemption unlawful. They quashed the exemption just eight months after its introduction leaving many Self-Builders in indefinite limbo.
Government is committed to help smaller local housebuilders and double the size of the Self-Build to 20,000 homes a year by 2020. NaCSBA immediately campaigned for the reintroduction of the exemption and in August 2015, DCLG was granted leave to appeal. The High Court’s decision to quash the exemption has been reversed with immediate effect and Government is expected to update its guidance accordingly. However, it is still possible that the original appellants may seek leave to appeal to the Supreme Court.
High Quality Affordable Homes
“NaCSBA welcomes the Court of Appeal ruling,” says Chair, Michael Holmes. “This exemption, together with the existing exemption from the Community Infrastructure Levy (CIL), brings us one step closer to NaCBSA’s stated aim to make a high quality, sustainable, affordable individual home an option for the many and not just the few."
This provides the basis for a legal agreement between an applicant seeking planning permission and the LPA. It is used to mitigate the impact of new homes on the local community and infrastructure, e.g. extra cars on the roads, more children attending nearby schools, extra strain on local services.
Section 106 Agreements often require a financial contribution, made prior to the project starting — which could result in more upfront costs for Self-Builders. Exemption was introduced for them in November 2014, but some councils were quick to seek to challenge this decision.
As NaCSBA members
We support and applaud NaCSBA efforts in achieving this important change in the law. Freeing Self-Builders from this financial burden will allow them to build better, more economical, Low Energy Homes, thereby contributing enormously to reducing CO2 emissions and providing much more sustainable homes for the future.
Visit the Benfield ATT Group website for more information on §106 Decision Saves S-B’s £1,000’s