The Ministry of Housing, Communities and Local Government has launched a consultation on standardising planning obligations for medium-sized residential developments in England. The Government’s stated aim is to simplify negotiations, reduce delay, and provide greater consistency and certainty in relation to planning obligations for developments delivering between 10 and 49 homes.
Speaking during a Parliamentary debate on 28 January 2026, Housing and Planning Minister Matthew Pennycook stated that “Section 106 agreements are, and will remain, an essential mechanism for delivering social and affordable housing.” However, he also acknowledged that: “In recent years, the negotiation of section 106 agreements has become synonymous with inefficiency and delay.”
The consultation therefore seeks to address concerns that the current process can be overly complex, time-consuming and costly, particularly for small and medium-sized developments.
What is Included in the Consultation?
The consultation is divided into two parts.
Part 1 seeks views on:
- A draft bilateral Section 106 Agreement comprising standard clauses and schedules dealing with financial contributions and local planning authority (LPA) covenants; and
- A draft unilateral undertaking comprising standard clauses and a schedule dealing with financial contributions.
Part 2 seeks views on:
- A draft affordable housing schedule for full planning permissions, including a discretionary cascade mechanism; and
- A draft affordable housing schedule for outline planning permissions.
The Government has also indicated that further materials will be published, including model obligations and planning conditions intended to promote greater consistency in planning decision-making.
Key Issues for Consultees
The principle of greater standardisation is likely to be welcomed across much of the development sector. A successful suite of standardised templates could reduce unnecessary drafting, enable applicants’ solicitors to prepare acceptable first drafts more efficiently, and allow negotiations to focus on site-specific issues rather than boilerplate wording. In turn, this could reduce the time and cost involved in securing planning obligations. However, several practical questions remain regarding how the proposed approach will operate in practice.
1. Consistent Use of Templates
At present, LPAs would remain free to continue using their own precedents and there would be no requirement for them to adopt the proposed national template. If LPAs are under no obligation to accept or work from the standardised documentation, many of the anticipated benefits could be undermined. Divergent approaches between authorities may continue to generate delay and increase legal costs, limiting the effectiveness of the reforms.
2. Development-Specific Obligations
Whilst adopting a standard template, it is nevertheless essential that LPAs retain sufficient flexibility to respond to the specific circumstances of individual developments. This includes agreeing appropriate trigger points for planning obligations, while ensuring that only obligations that are necessary to make a development acceptable in planning terms are secured, rather than allowing obligations to expand beyond what is necessary or proportionate simply because similar provisions have been included in similar documents.
It is noteworthy that, aside from the proposed affordable housing schedules, neither the draft unilateral undertaking nor the draft Section 106 Agreement includes substantive drafting relating to obligations beyond financial contributions. In practice, many developments require a broader range of obligations, and it remains to be seen how those site-specific requirements will be incorporated into a standardised framework.
3. Affordable Housing and Cascade Mechanisms
For small and medium-sized developers, difficulties in securing a registered provider purchaser can significantly delay delivery and create substantial additional costs. In some cases, developments may stall altogether.
The relatively small number of affordable housing units delivered on medium-sized schemes can make them less attractive to registered providers. For example, a 49-unit development delivering 40% affordable housing would provide circa 20 affordable homes.
Small, dispersed clusters of affordable housing often present operational and management challenges for registered providers, who must balance delivery targets with long-term maintenance and management costs.
The challenges surrounding affordable housing take-up are well documented, but they are often felt most acutely by SME housebuilders delivering smaller schemes.
The Government has acknowledged this issue by including a discretionary cascade mechanism allowing, in certain circumstances, payments in lieu of on-site affordable housing provision. However, as currently drafted, the mechanism remains optional and LPAs may choose not to incorporate it into agreements. Its practical value will therefore depend on the extent to which LPAs are prepared to adopt the mechanism consistently.
Looking Ahead
The consultation represents a positive step towards reforming what is often viewed as a complex and time-consuming system. Greater consistency in Section 106 documentation has the potential to streamline negotiations, reduce costs and improve certainty for developers and LPAs alike.
Nevertheless, the success of the proposals will depend largely on the extent to which the standardised documents are adopted in practice and whether they strike an appropriate balance between consistency and flexibility.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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