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Time for the pendulum to swing back Matthew Warburton - 25/04/2014

Pickles300Communities Secretary Eric Pickles told Inside Housing this week that councils had "strangled an already declining housing market" by insisting on unrealistic targets for affordable housing in new developments. 

This is of course the same argument - generalised to cover all section 106 planning requirements, not just affordable housing - that was used to justify the measures in the Growth and Infrastructure Act passed last year allowing developers to apply for relaxation of requirements they believed to be onerous.

But, in the two years since civil servants started work on the provisions in that Act, the housing market has turned a corner and land and house prices are rising sharply, particularly in London.  It is reasonable for local communities, and people in housing need, to benefit from this upturn, not just developers providing new housing for sale. 

It is easily forgotten how significant planning obligations once were in funding infrastructure and affordable housing.  In 2008, planning obligations in s106 agreements were worth almost £5 billion and contributed to the provision of 30,000 new homes.  And there was little evidence of developer opposition to the principle.  This clearly reflects the buoyancy of the housing market and the economy at that time, but that only helps to underline the point that the shift in developer attitudes and government policy by 2012 was about who should carry the blame and pain for the collapse in the development market after 2008. 

At the time, councils protested that that the government had little evidence to show that unrealistic targets were responsible for stalled sites, and sought to show that most councils had been only too willing to renegotiate requirements to get developments restarted.

Now that market conditions are improving, it is time for the pendulum to reverse its direction.  Councils should be enabled and encouraged to set planning requirements that ensure that developers fund their fair share of infrastructure costs and affordable housing.

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