Home owners are subsidising infrastructure provision in their local authority area. How?
Section 106 of the Town and Country planning act allows developers to contribute to local infrastructure where planning permission would otherwise have to be refused. The original intention was to facilitate development of more new homes and provide road improvements, school places, affordable homes and leisure facilities for the new population. In recent years local planners have been using section 106 to provide more and more local infrastructure, arguably not always of direct benefit to the development under question. It is being used almost as legalised bribery to extract as much cash as possible from the big house builders.
It is acknowledged that the commercial house builders are driven by profit and shareholder value, so they are going to do everything they can to retain their profit margins including:
- Cost cutting on home quality.
- Cramming as many houses as they can onto the development.
- Skimping on estate amenities preparation.
- Not offering estate grounds/amenities/roads up for adoption.
- Implementing the private estate model with unregulated management companies we all know and love!
- Unjustifiable sale of leasehold houses with onerous ground rents and onward sale of their freeholds to offshore investors.
- Not providing affordable homes via commercial viability assessments.
Home buyers on these estates are therefore purchasing a sub standard home on a sub standard estate and pay unregulated estate charges – effectively a private tax. There is no doubt that future saleability and value of these homes will be affected.
For leasehold houses with high ground rents and doubling clauses, the homes are unsaleable right now.
A HorNet member has researched the topic, and if you are interested, there are links in this document to articles about section 106 use and its damaging effects: S106 Articles Links
The bottom line is that we, the new home buyers, are getting a raw deal as a direct result of the way local planners are utilising section 106.