Source · Select Committees · Public Accounts Committee
Recommendation 25
25
Accepted
Home Builders Federation reports 17,000 unsold Section 106 homes and blocked private housing
Conclusion
In its written submission, the Home Builders Federation (HBF) quoted its research which had found that at least 17,000 Section 106 affordable housing units were unsold. It also claimed that the delivery of almost 32 C&AG’s Report, para 2.11 33 Qq 14, 42 34 Letter from the Permanent Secretary, 9 July 2025 35 C&AG’s Report, paras 2.17, 2.18 36 C&AG’s Report, para 2.20 14 100,000 private homes was blocked or delayed, because construction often cannot start on a site until a buyer for the Section 106 affordable homes is found.37
Government Response Summary
The government agrees to diagnose the extent of the Section 106 affordable housing problem more confidently, and ensure the Section 106 Affordable Housing Clearing Service is working much more effectively. They are progressing work at pace on a holistic policy package, to be confirmed shortly, that will deal with the legacy problem of existing uncontracted S106 units and also, prevent the problem recurring.
Government Response
Accepted
HM Government
Accepted
6. PAC conclusion: Given the shortage of social housing, it is unacceptable that unsold homes funded through Section 106 agreements are sitting empty. 6. PAC 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. 6.1 The government agrees with the Committee’s recommendation. Target implementation date: Spring 2026 6.2 The department recognises the Committee’s concern and is taking steps to robustly diagnose the scale and causes of the build-up of unsold and uncontracted Section 106 (S106) units. Estimates vary, but it is not in dispute that thousands of unsold S106 homes have built up over recent years. This is as a result of the complex interplay between a range of factors ranging from affordable housing providers’ constrained financial capacity to concerns, both perceived and real, about the quality, standard, and price of available Section 106 homes. 6.3 In December 2024, the government launched the Homes England Clearing Service to connect buyers and sellers of S106 homes and gather data on delivery challenges. However, participation has been optional, and uptake limited. 6.4 While there are positive signs of an increasing appetite among affordable housing providers to take on uncontracted and unsold S106 homes post-spending review, there remains a serious problem that must be dealt with. The government is progressing work at pace on a holistic policy package, to be confirmed shortly, that will deal with the legacy problem of existing uncontracted S106 units and also, prevent the problem recurring. Through these measures, the department will deepen its understanding of the underlying issues in the S106 market, with an intention to have a clearer picture in the next few months, as the Committee recommends and lay the foundations for a simpler, more transparent, and more resilient system whilst protecting social and affordable housing delivery.