When the former Deputy Prime Minister and Housing Secretary, Angela Rayner, announced last Summer that “hundreds of thousands of social and affordable homes…will be built…to usher in a decade of housing renewal” , we may not have expected the range of Government policy interventions aimed at easing obligations on developers to deliver affordable homes through S106 that followed. However, faced with sluggish housing delivery, unaided by a large number of planning permissions not being built on viability grounds, that is what we have seen.
The ability to negotiate down affordable housing provision in schemes on viability grounds has long been a feature of the planning system, but it can often be met with scepticism from decision makers. Post-consent, there has been significant procedural uncertainty as to how planning obligations can be revisited to aid delivery.
Will these measures genuinely help delivery? And are we seeing the start of a shift away from the long-held policy position that the market is responsible for the delivery of affordable homes?
Delivering viable planning permissions
The emerging draft NPPF
Draft NPPF Policy HO8 says that where a proposal meets or exceeds development plan affordable housing requirements, developers can take a more flexible approach to market housing mix. This allows unit sizes to be adjusted to support a scheme that is overall viable and deliverable, even if the mix does not meet the Council’s requirements.
London emergency measures
In London, the ‘Emergency Measures’ recently consulted upon will see applications benefit from the streamlined non-viability tested route where they provide 20% AH, as opposed to the previous 35%. There will be temporary CIL relief for schemes that deliver 20% AH.
Whilst not forgetting that some, particularly larger schemes rely on early sales of affordable units to kick-start delivery and assist with cash-flow, many, especially SME developers will no doubt benefit from this flexibility in arriving at a tenure and unit mix that is viable and can be delivered.
Standardising Viability Assessments
Draft NPPF Policy DM5 seeks to restrict the circumstances in which viability assessments can be used to negotiate down infrastructure contributions, including affordable housing. Policy PM12 reinforces this by requiring local plans to set clear, fixed expectations for affordable housing and developer contributions.
Whilst on the one hand, ‘front-loading’ viability into plan making should introduce clarity and reduce protracted negotiations at application stage, there has been criticism that this policy seeks to oversimplify development viability, which it is said is inherently volatile to market changes and a shifting funding landscape.
The ambition to standardise a complex and uncertain process is understandable, but there remain questions as to whether that is practically achievable.
Revisiting AH planning obligations
The ability to revisit previously agreed obligations has long been a challenge, even where viability has demonstrably moved on since a permission was issued. To that end, in January 2026, Housing and Planning Minister Matthew Pennycook issued guidance to the Planning Inspectorate and local authorities urging a “pragmatic, evidence-led approach” to modifying planning obligations, including those relating to affordable housing. This followed similar messaging in December 2025 from the Secretary of State, Steve Reed, alongside the draft NPPF update.
Local authorities are frequently hesitant to ‘re-open’ Section 106 agreements, particularly where affordable housing is concerned. They are, after all, trying to maximise affordable housing delivery and can be sceptical to post-consent pleas of viability challenges.
The Government has now explicitly acknowledged that viability, often driven by affordable housing requirements, is acting as a brake on delivery.
The proposed introduction of Section 73B, via secondary legislation, is intended to create a clearer route to varying planning permissions and obligations. In the meantime, local authorities are encouraged to review requests to vary planning obligations via S73 deed of variations, robustly but pragmatically.
For many practitioners, this provides long-awaited clarity. Decision makers are required to engage pragmatically, rather than defensively, when schemes stall. If reducing affordable housing provision results in homes actually being built, that option should be on the table.
Also in January, the Policy statement: a roadmap for Section 106 delivery in England was published. This addressed the practical difficulties that can be experienced in transferring S106 affordable units in consented schemes to registered providers. Again, local authorities are encouraged to look flexibly at options to resolve that, including potentially changing affordable units to market homes where that would help get spades in the ground.
Direct investment
Planning reform is only one side of the equation. The Government has also committed £39 billion to affordable housing programmes between 2026 and 2036, with a target of delivering at least 300,000 new affordable homes. Low-cost loans to housing associations form part of this strategy. Of the £39 billion, £11.7 billion is allocated to the Greater London Authority.
Time will tell how effective the Government’s Social and Affordable Homes Strategy will be, but this does demonstrate that the market is not being expected to do all of the heavy lifting in the pursuit of ambitious affordable housing delivery through S106.
A fundamental change of approach?
If these measures are not a fundamental change in policy, they do represent a fundamental shift in tone. These interventions overtly recognise that viability, and the role that AH plays in that, can be a genuine barrier to delivery, and it requires that decision makers look to resolving such issues pragmatically. The message is clear: housing delivery is paramount, whether or not schemes marry precisely with tenure and mix policies.
If 1.5 million homes are to be built by 2029, the system cannot afford to let consented schemes sit idle. The Government has acknowledged that reality. The profession now has to navigate what that acknowledgment looks like in practice.
S106 affordable homes will continue to play an important role in the wider AH delivery picture, where viable, but the Government’s direct investment in delivery will do too. We are perhaps in the foothills of a wider policy shift away from the general expectation that it is the market’s responsibility to deliver affordable homes.
To discuss the themes in this blog or how Nexus can help your scheme, contact Nik Smith.
