While the ongoing funding crisis continues to restrict mortgage lending, it is more important than ever that so-called section 106 agreements are applied as consistently and simply as possible by councils when agreeing planning permission.
Our new briefing note sets out the concerns of lenders and urges more consistent use of the model section 106 agreement developed with the government’s approval in 2006. This model agreement seeks to ensure that any restrictions in planning permission for low-cost home-ownership schemes do not restrict the ability to lend on properties.
Better awareness of the model agreement by planning and housing authorities, along with discussion with lenders while negotiating and agreeing a section 106 agreement, are important to help avoid creating barriers to lending.
We have been working recently to raise awareness of the types of restrictions currently found in section 106 agreements that constrain mortgage lending. We are seeking the help of a range of organisations to ensure our briefing note is distributed and properly understood. The Homes & Communities Agency, Royal Town Planners Institute, Chartered Institute of Housing and National Housing Federation are all well placed to help bring lenders’ concerns to the attention of local authorities and housing associations.
Our briefing note is just one part of the work we have been pursuing to highlight and lobby for improvements that will make low-cost home-ownership schemes more successful.
