Think Tank Articles

Planning Gain: Self-builder's and Small Developer's Guide​​​​​​​

Arkhi Canyon Edge

Planning conditions vs planning obligations. whats the difference, and what should you be watching out for. 

Planning condidtions vs Planning Obligations

Planning Condidtions are set out in the National Planning Policy Framework (NPPF). Instead of refusing a planning application, the LPA may attatch a series of condidtions witht eh approval of consent -  you'll find these on your decision notice from the LPA. The condidtions could require additional approval (through a secondary application in relation to materials for example) or restrict the use of the site. The NPPF states that planning condidtions should be imposed when they are necessary, relevant, enforceable, precise and reasonable in all aspects. 

Planning applications can also be subject planning obligations. Planning obligations are set out in the NPPF and are described as 'legally enforceable obligations entered into under section 106 of the Town and Country Planning Act 1990 to mitigate the impact of a development proposal’. Planning Obligations are also referred to as ‘S106 Agreements’, ‘Planning Gain’ and ‘Developer Contributions’.

What Are S106 Obligations?

Unlike the Community Infrastructure Levy, which is a tariff-based system, Section 106 is charged based on the specific needs of the local community. In other words, these obligations are intended to make acceptable development which would otherwise be unacceptable by offsetting these negative impacts. These obligations apply to land that is subject to planning permission and transfer with the land to future owners. If you are looking to buy a plot of land to develop or self-build, it’s worth doing a little investigative digging to clarify whether there are any planning obligations associated what that site or parcel of land.

 

Section 106 Agreements are used to prescribe, compensate a mitigate a developer’s impact on the specific site. Section 106 Planning Obligations must be directly relevant to planning, necessary to make proposed development acceptable, related to development as well as being reasonable and proportional.

 

A s106 obligation can:

-       restrict the development or use of the land in any specified way

-       require specified operations or activities to be carried out in, on, under or over the land

-       require the land to be used in any specified way

-       require a sum or sums to be paid to the authority on a specified date or dates or periodically.

 

The most common form of section 106 agreements are affordable housing requirements, but they can also include compensations for the loss of open space or making contributions to the provisions of additional infrastructure to serve the development i.e. educational facilities, transport networks and public facilities.  A Section 106 Agreement can have conditions attached and they can specify restrictions for a time period or indefinitely.

 

We advise that early discussions with the LPA will allow for more positive negotiations between yourself (the ‘developer’) and the LPA. These negotiations are based on financial assessments and viability statements in larger developments. You can appeal against obligations which they consider to be unreasonable.

How Does This All Link To CIL?

In 2010, the Community Infrastructure Levy was introduced – read more about CIL . The Community Infrastructure Levy Charging Schedule is currently a voluntary tariff-based system that LPAs can choose to impose on new development. The tariff is based on zoned charging areas and these can differ over a county or LPA’s area.

 

The Community Infrastructure Levy Regulations state that:

-       Planning obligations must; be necessary to make the development acceptable, be directly related to the development; and they must be in scale to the development.

-       Planning obligations cannot be used to double charge developers for infrastructure. Once an authority has introduced the levy in its local area, it must not use obligations to fund infrastructure they intend to fund via the levy.

 

The Community Infrastructure Levy Regulations state that section 106 agreements cannot be used to double charge developers for infrastructure – also known as ‘double-dipping’. In summary, once the authority has introduced the CIL levy in its local area, it must not use section 106 agreements to fund infrastructure they intend to fund by CIL collections - CIL collections can’t be used to subsidise affordable housing as this is done through S106 agreements.

 

Exmptions To CIL

Community Infrastructure Levy can be a lengthy and stressful process, especially for self-builders.  Applying for an exemption needs to be done prior to any commencement on site. Early preparation and execution of this process is key to secure the exemption.

 

We’ve written a generic handy guide to the whole CIL process which can be read here.

Forms for exemptions can be found on the Planning Portal website and you can read our ‘Following the Regulations & Common Pitfalls’ CIL article.

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Exmptions To Planning Obligations

Exemption for Section 106 Agreements have been introduced in the past and removed several times for a variety of reasons. Our best advice at this point is to contact your Local Planning Authority to discuss whether they operate an exemptions policy for S106 and how you can benefit from this process. 

Whats Next?

It’s important to remember that Planning Consent is not the only form of legislation you will require to build your scheme. Post-Planning Decision, you will need to adhere to building regulations if your project includes structural alterations. This doesn’t include repair work but new -build dwelling and extensions to existing properties will need to be checked.

 

At this point, we’d also like to draw your attention to Community Infrastructure Levy (CIL) and how this can affect your project in financially. Read our short guide for more information. This stage of the process must be submitted and decided upon by the LPA prior to you commencing any work on site.

 

How Can We Help?

We are constantly looking to develop relationships with property professionals with focus on site development schemes across the North West and we want to hear from you.

 

If you’d like you know more, take a look at our Arkhi Plan of Work or get in touch for a free initial consultation.