Section 106 changes in new bill could unlock development land – JLL

A NEW bill aimed at fast-tracking large-scale business and commercial projects could help to unlock major pieces of land, suggests property consultants Jones Lang LaSalle.

Nigel Simkin, associate director, planning and development in JLL’s Birmingham office, says the bill could make a real difference to the property market.

The Growth & Infrastructure Bill is now in its final stages in the House of Lords and has been proposed by the Government following its realisation that it needed to stimulate development to aid recovery of the economy.

Whilst many are getting excited by the bill’s recommendation for developers to be able to go direct to the Secretary of State to bypass local authorities, Simkin says that what he finds more interesting is the bill’s proposals for Section 106 agreements.

The Growth & Infrastructure Bill proposes new action on stalled developments, allowing developers to require local authorities to reconsider their Section 106 agreements agreed in more prosperous market conditions.

At present there is no obligation for Section 106 agreements to be revisited for a period of up to five years, unless local authorities agree to it.  Under the proposed new bill, this would change and 106 obligations can be renegotiated if they make a scheme economically unviable.

Simkin said: “This shows a pragmatic approach from the Coalition Government to seek to enable land owners and developers to renegotiate affordable housing obligations where they are unviable. 

“Whilst many local authorities have taken a fairly lenient position on the five year rule in the past and allowed the 106 to be renegotiated in advance of this deadline, the provisions of the bill, as currently drafted, would place a statutory duty on the local planning authority to reconsider affordable obligations entered into through a Section 106 agreement.

“This could be the real deal breaker for developers and landowners trying to unlock land and as the bill heads for Royal Assent, we are already working with a number of clients, suggesting they review their 106 agreements and see if development could now be a possibility.”