Glossary
Section 106: Planning obligation
A legal agreement that makes a development acceptable, often with affordable homes or payments.
What it means
A Section 106 agreement, named after the section of the Town and Country Planning Act 1990, is a legal obligation attached to a planning permission. It can require affordable homes, open space, or payments towards schools, transport or healthcare, and it binds the land, so it passes to the buyer. Contributions are negotiated, and a viability assessment can reduce them if the scheme can't support them.
Worked example
ExampleTwelve homes with a £4,000 per home contribution to schools and open space.
- Section 106 payments
- 12 × £4,000 = £48,000
- Plus any affordable homes
- Sold at a discount, lowering GDV
Ask the council early what it will want. Affordable housing usually costs more than the payments.
Information, not advice. Example figures are fictional and for illustration only.