Government proposes standard Section 106 agreements

The Ministry of Housing, Communities and Local Government has proposed four standard Section 106 planning agreement templates for medium-sized housing sites in England, targeting the time and cost associated with negotiating development obligations.

The consultation covers schemes of between 10 and 49 homes on sites of up to 2.5 hectares, the definition of medium development introduced through the National Planning Policy Framework published on 17 August. Responses are being invited until 11:59pm on 20 October.

Two templates address the legal structure of planning agreements. One provides a bilateral Section 106 agreement with standard clauses, financial contribution schedules, and local authority covenants, while the second covers unilateral undertakings and associated financial contributions.

The remaining documents are affordable housing schedules for full and outline planning permissions. The full-permission version includes an optional cascade mechanism that can be used where the originally intended affordable housing arrangement cannot be delivered.

Legal drafting sits between consent and construction

Section 106 agreements are used to secure obligations required to make a development acceptable in planning terms. Depending on the scheme, these can include affordable housing, financial contributions, highways measures, public space, education provision, and other site-specific mitigation.

The government’s consultation identifies lengthy negotiation as a particular problem for medium-sized developments, where legal and planning costs can represent a larger proportion of overall project overhead than on major schemes. Smaller developers may also have fewer internal resources to manage repeated rounds of drafting between solicitors, planning officers, landowners, and lenders.

Standard documents are intended to reduce the amount of legal wording recreated on each project. If authorities and developers can begin with agreed clauses, negotiations can concentrate on the value, timing, triggers, and site-specific obligations that genuinely vary between developments.

The proposal does not remove those negotiations. A development requiring highway works, unusual drainage infrastructure, particular affordable housing arrangements, or complex land ownership will still need provisions tailored to the site. The potential saving comes from reducing repeated debate over clauses that perform broadly the same function from one agreement to another.

That process has a direct effect on construction programmes because planning committee approval does not always mean a contractor can mobilise. Where permission remains subject to completion of a Section 106 agreement, procurement, finance drawdown, land transactions, and a start on site can all remain dependent on the legal document being executed.

For medium schemes, a delay of several months can materially affect finance costs and contractor availability. Tender pricing can move while negotiations continue, supply chain capacity may be lost to other projects, and seasonal constraints can push groundworks or infrastructure into a less favourable part of the year.

The templates were developed through work with the Planning Advisory Service after Town Legal LLP was appointed to help prepare the standard documentation. The consultation follows earlier government work on reforming site thresholds and the January 2026 roadmap for Section 106 delivery in England.

Policy has increasingly focused on medium development because the category sits between small sites and major schemes. Projects of 10 to 49 homes can carry substantial planning and infrastructure requirements but are often brought forward by regional or SME developers without the scale of legal and planning departments maintained by national housebuilders.

The revised NPPF therefore introduces a formal medium-development category alongside the proposed legal templates. Government policy links that change to diversifying housing delivery and increasing the role of smaller builders, although the effect will depend on whether the new category translates into faster decisions and completed agreements on individual sites.

Standardisation also requires adoption by local planning authorities. Model wording can shorten negotiations only where councils, developers, solicitors, landowners, and funders are prepared to use it as the normal starting point rather than treating every clause as an invitation for bespoke amendment.

The consultation acknowledges that further reform is likely to follow. Government intends to develop additional model planning obligations and conditions, placing the four documents within a wider attempt to make planning requirements more consistent and easier to administer.

For contractors, the useful measure will appear later in the programme. If standard forms shorten the interval between planning resolution, signed agreement, procurement, and mobilisation, the change will have a tangible effect on delivery. If every project still produces extensive legal redrafting, another set of templates will simply have been added to an already crowded planning process.