Source · Select Committees · Public Accounts Committee
Recommendation 26
26
Accepted
Homes England launched Section 106 Clearing Service with initial uptake and 800 listings
Recommendation
In response to this problem, in December 2024, Homes England (an executive non-departmental body sponsored by the Department) 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 with each other.38 We asked the Department whether it thought the Clearing Service was working. It told us that over 100 local authorities, over 100 developers and nearly 200 RPs had signed up to it, and that around 800 unsold housing units had been listed.39
Government Response Summary
The government agrees to 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, with a target implementation date of Spring 2026. 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.