Thanks to planning reforms we can finally drop foolish section 106 demands
Time to throw out bad plans
In the middle of a housing shortage, is it really worth stalling the building of more than 200 properties in an area for the sake of a rose garden? This is a question I’ve been asking myself for more than a year now and, thanks to the new planning reforms announced by the government, it seems that the answer may finally be no.
As first revealed by Inside Housing, section 106 agreements can now be removed if they make a project commercially unviable for a developer. This can only be a good thing for the property market and the economy on the whole.
Freshstart Living currently has two developments in Manchester which, despite having planning permission, have been stalled for more than a year by Trafford Council due to section 106 agreements. We have planning permission to transform the two adjacent sites - Trafford Press and Empress Mill - into 216 one, two and three-bedroom apartments.
However, we are unable to start work onsite due to the obstructive, outdated section 106 agreements which require us to pay nearly £1 million before we can start work, including more than £15,000 for a red rose forest and £230,000 for a children’s play area.
The agreements were signed in January 2007 before Freshstart acquired the developments and, importantly, prior to the property market downturn. They may have been pertinent when the apartments where valued at more than £200,000, however we are selling the apartments at £65,000 to £100,000. If we were to go ahead and pay the section 106 fees, we’d have to increase the price of each unit, making the developments commercially unviable for us and unaffordable to property buyers.
If we really want to stimulate economic growth we need to get building and stop lengthy renegotiations over inconsequential section 106 agreements. What good is a red rose forest or a children’s play area if there are no residents living in the area to enjoy them in the first place?
Furthermore, once completed, the properties are expected to be worth more than £120,000 which means they should fall into Trafford Council’s tax band C, generating approximately £250,000 per year in income for the local authority. This is revenue the council is missing out on while the developments are empty.
This is a prime example of how outdated section 106 agreements are not in the common good and hopefully these planning reforms will mean we can get to work and transform these two developments into more than 200 homes.
Charlie Cunningham is chief executive of Freshstart Living