Charges would be scrapped that require a large payment and add considerable costs for developers looking to build a small number of properties or people wanting to build their own home.
According to the government, these reforms would help increase both house-building and housing supply, and lower the construction cost of new-build housing and home improvements.
It is claimed that a number of building projects have been rendered unviable by councils applying exorbitant Section 106 charges, such as a £32,000 charge that would be required to build a self-build two-storey three-bedroom house in the New Forest, and a £20,000 charge to build two modest-sized homes in Andover.
The charges, which can also be applied to the building of extensions and annexes, require a levy for affordable housing. This would be scrapped for self-builders, homeowners and developers wanting to bring redundant buildings back into use, along with builders eager to make use of small sites to provide much needed housing.
Communities secretary Eric Pickles said that there were “too many levies and charges on housing”.
He said: “People who have worked hard and saved hard should be able to build a home or make changes to their property without paying out excessive charges. Their home should be their castle and not a cash cow for their local council. They shouldn’t be clobbered with thousands of pounds of charges just for building a house or adding an annexe for an elderly family member.
The proposals follow recent changes that exempt self-builders and householders building extensions and family annexes from paying Community Infrastructure Levy, which had been placed on building over a certain size. Before the change, in some parts of London an average sized self-build house could be hit with up to £43,700 of charges and outside London up to £11,400 in levy charges were being imposed.
The proposed changes to Section 106 bring this charging into line with the infrastructure levy. It also supports changes which mean from April there will no longer be a council tax surcharge on family annexes.
Developers of smaller housing schemes of 10 homes or fewer and those bringing disused buildings back into use will also be exempt from affordable housing levies.
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