SME house builders boosted by Section 106 ruling, says FMB

Published:  13 May, 2016

The Appeal Court’s decision to uphold a government initiative to waive affordable housing requirements for small developments is a boost for SMEs and house building, the Federation of Master Builders (FMB) has said.

Brian Berry, Chief Executive of the FMB, said: “We welcome the Appeal Court’s decision to confirm the government’s right to waive Section 106 affordable housing contributions for sites of ten units or fewer. It’s widely recognised that if we are tackle the long-term undersupply of new homes in this country, then we will need to see renewed growth in output from SME house builders. Today’s verdict will go a long way in backing these firms. It will make the economics of small scale development that much easier and should increase the use of small sites in sustainable locations for the delivery of new homes.”

Berry noted that nearly one-in-two SME house builders know of sites they would otherwise be interested in developing, but which they believe would be unviable because of the likely combination of Section 106 and the Community Infrastructure Levy charges.

He argued that these contributions are prohibitive for many smaller developers, killing off thousands of otherwise viable schemes, and acting as a serious barrier to expansion. The threshold’s reinstatement will protect the smallest developments from being lumbered with unaffordable requirements, allowing them to bring forward small-scale, sustainable developments.

Image courtesy of Shutterstock/ Brandon Bourdages

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