Industry leaders are advocating for the abolition of Section 106 payments, which they say are hindering the construction of affordable homes across England and Wales. Currently, over 17,000 homes are stalled due to housing associations' inability to finance purchases from developers. While the government implemented a clearing service to address this issue, experts argue that more substantial reforms are necessary. The financial strain on housing associations, exacerbated by safety and efficiency improvements, complicates the situation, affecting not only large developers but also self-builders who face inconsistent exemption applications.
Housing associations are facing considerable financial difficulties, making it challenging for developers to sell affordable homes they are required to build under legal agreements.
The bottleneck has prompted the Home Builders Federation to urge the government to allow housing associations to use state grants to buy Section 106 homes, rather than relying solely on their own funds.
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