Government kickstarts housebuilding
14 August 2012
Ministers are to relax rules around private investment in housebuilding to unlock development in the housing sector.
Communities Secretary Eric Pickles has announced authorities will be able to renegotiate Section 106 agreements that were signed during the economic boom and are no longer financially viable.Under the deals, developers are required to either make a financial contribution to the community or provide affordable or social housing as part of their planning permission. In many cases, the recession and slump in land values has made these deals untenable for the private contractors.
The communities department will now provide teams of intermediaries to support councils and developers to renegotiate these deals.
Councils in Leeds, Ipswich, Corby, Swindon, Ashford, Gloucester, Kirklees, Carlisle, Northumberland and Durham will be the first to benefit from the support.
The government is also launching a consultation proposing that developers are given an option to renegotiate Section 106 deals signed prior to April 2010.
Meanwhile, the Financial Times has reported that ministers are also planning to underwrite bonds issued by housing associations. The initiative would allow the associations to work with private developers to fill the affordable housing gap left by the relaxation of the Section 106 rules.
