Recommendation 6

Given the shortage of social housing, it is unacceptable that unsold homes funded through Section 106 agreements are sitting empty. There is a growing problem of registered providers of social housing (RPs) not buying affordable homes funded by Section 106 agreements. In response, in December 2024, Homes England began the Section 106 Affordable Housing Clearing Service that allows developers to upload details of new homes for which they have been unable to find a buyer, and encourages buyers and sellers to connect. The Department reports that, at the time we took evidence, over 100 local authorities, over 100 developers and nearly 200 RPs had registered for the Clearing Service. The Department also reports that around 800 unsold homes have been listed on the Clearing Service, which is far below the figure of at least 17,000 that exist across the country according to a survey by the Home Builders Federation. The Department accepts that it is unclear why there is such a significant difference in the numbers of unsold affordable homes, and explains that it is engaging with the Home Builders Federation to try to understand better what is going on. recommendation In its Treasury Minute response, the Department should set out how it will diagnose the extent of the Section 106 affordable housing problem more confidently, and how it will ensure the Section 106 Affordable Housing Clearing Service is working much more effectively.