High Court decision reversal keeps exemption from s106 planning obligation payments for small sites

A recent Court of Appeal Civil Division hearing has reversed last year’s High Court decision to remove the exemption from s106 planning obligation payments for small sites.

The exemption was originally introduced by Minister for Housing and Planning, Brandon Lewis MP, by Ministerial Statement in 2014. It freed self-builders from the s106 planning obligation payments which obliged them to divert considerable funds from their build budgets into contributions for affordable housing and other local authority infrastructure projects.

The National Custom and Self Build Association (NaCSBA) has campaigned for the exemption on the grounds that the payments, which were designed to mitigate the impact of major development on local infrastructure, were disproportionate to the impact of small developments and in particular single custom or self-build homes.

Talking about the Court of Appeal decision NaCSBA chairman Michael Holmes said:

“NaCSBA welcomes the Court of Appeal ruling. This exemption, together with the existing exemption from the Community Infrastructure Levy (CIL), brings us one step closer to NaCBSA’s stated aim to make a high quality, sustainable, affordable individual home an option for the many and not just the few.”

The original exemption, applied to sites in England of 10 new homes or less, but some local authorities disagreed with the exemption. In July 2015 the judge in a High Court case brought by two neighbouring authorities, Reading and West Berkshire, found the exemption unlawful. The High Court Judge’s ruling went against the intentions of the Government to accelerate national development numbers, support smaller homebuilders and the custom/self-build sector.

In support of the growing numbers of potential custom and self-builders the NaCSBA launched a campaign for the reintroduction of the exemption and in August 2015, DCLG was granted leave to appeal. The High Court’s decision to quash the exemption has been reversed with immediate effect and the Government is expected to update its guidance accordingly.