Planning gain pays for more than half of social housing

Private developers are providing nearly 50% more affordable housing than they were two years ago, according to Yvette Cooper, the planning minister.

Cooper told the House of Commons last week that the number of affordable homes built as a result of section 106 “planning gain” contributions had increased 46% from 16,380 to 23,869 between 2003/04 and 2005/06, the last full year for which statistics are available.

Over the same period the number of social rented homes built with the help of planning gain increased from 10,722 to 14,292 – a 33% jump.

This means that nearly two-thirds (61%) of social rented housing developed last year was built with help from section 106 contributions.

The same was true of more than half (55%) of all affordable housing. Affordable housing includes that for key workers and shared ownership as well as social rented housing.

In 2003-04, by contrast, developers helped to pay for 47% of social rented housing and 44% of affordable housing.

Broken down regionally, the figures show that section 106 agreements contributed to 84% of social rented housing built in the South-east.

Nick Raynsford, a former housing minister, said the figures showed that the section 106 system was increasing affordable housing, which he warned was being put at risk by proposals to introduce a planning gain supplement (PGS).

He said: “The proposed PGS raises all sorts of very serious problems, including less social housing.”

“I have always argued that the priority must be to improve the ability of local authorities to negotiate section 106 agreements. We are on a learning curve with section 106 and we should not be diverting our attention.”