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Section 106 agreements and other planning obligations

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General information

What is s.106?

As part of the planning process, the Council and owners of a property in relation to which planning permission has been applied for may enter into a legal agreement referred to as a “Section 106 Agreement” or “Planning Obligation”.  This agreement will set out the terms for the owners or developer to provide or fund the provision of infrastructure, services or other impact mitigation measures on or off the development site.  The agreement might also include other provisions that the developer, owners or occupiers of the site will be bound to follow such as a prohibition on parking permits for new residents.   

Is the Community Infrastructure Levy (CIL) part of s.106?

No.  Payments secured under S.106 agreements are collected and administered separately to CIL payments.  Unlike s.106 payments a legal agreement isn't used to secure the liability to pay CIL.  Liability to CIL is automatically triggered by the grant of planning permission with payments triggered by commencement of works.  For more information on CIL visit Merton's CIL page.

Merton’s approach

The structure for how planning obligations have been considered and calculated in Merton is set out in the adopted Planning Obligations SPD 2006.  Since 1 April 2014 the Council has been charging the Merton CIL.  The Community Infrastructure Levy Regulations 2010 (as amended) limits the scope of what can be included in new S.106 agreements for infrastructure projects to those that are directly related to the site and prohibits securing S.106 agreements for projects included on the Regulation 123 list (see Merton's CIL page for a link to the Regulation 123 list) that the council intends to be the subject of CIL funding.  Affordable housing contributions (in-kind or financial) are unaffected by the introduction of the Merton CIL and will continue to be required, subject to financial viability and compliance with paragraph 012 Reference ID: 23b-012-20141128 of National Planning Policy Guidance on planning obligations.

Merton is currently  consulting on a revised draft Planning Obligations SPD (until 25 November 2014) setting out how S.106 will operate under the Merton CIL.

Developers should be aware that there may be other obligations necessary that are not included in the SPD particularly where more bespoke measures are required where they are necessitated by site specific or uncommon circumstances.

The 1 to 9 unit explanatory note provides guidance on how affordable housing requirements for schemes of 1 to 9 residential units set out in policy CS8 (Housing Choice) of Merton’s Core Strategy will be implemented in instances where development will involve more than 1000 square metres of floorspace.  For detailed information and evidence base behind this policy please refer to Merton’s Affordable Housing Viability Study published in 2010.  This study together with Merton’s Housing Values Information Update April 2012 (April 2012 Update) can be referred to regarding assessments of affordable housing requirements of development proposals. The April 2012 Update essentially updates the information contained on property prices which dates back to August 2009 in Merton’s Affordable Housing Viability Study.

Following a High Court decision on 31 July 2015 the Government rescinded its national planning policy guidance published on 28 November 2014, which stated that builders of between 1 to 10 dwellings would be exempt from having to meet affordable housing requirements.  Therefore, meeting the Councils policy CS8 (Housing Choice), including on-site affordable housing provision for proposals involving 10 or more dwellings and financial contributions for proposals involving less than 10 dwellings, is a requirement for all development seeking planning permission that the policy wording states it applies to.

Affordable housing contributions calculator (1 to 9 unit schemes)

The following calculators can be used to assist applicants/agents to calculate financial contributions in accordance with the validation requirements set out on our validation checklists and the 1 to 9 residential units explanatory note referred to above:

Affordable housing contributions calculator

For members of the community

Small amounts of money remain available from agreements signed prior to 1 April 2014, in relation to sustainable transport improvements and improvements to open spaces.  If you would like to enquire whether any S.106 monies might be available in your ward please contact us for a list of available S.106 money in your ward.  Should you have an idea to spend some of the money then please contact your ward councillor who can discuss the idea with you and get in contact with the relevant council officers to see if a project is viable and within the terms of the S.106 agreement under which the monies were received.

Individual S.106 agreements associated with planning applications validated since July 2008 and a selection of earlier agreements can be viewed by looking at the record of the planning application to which the S.106 Agreement is connected on the Planning Explorer.  For other agreements please contact the Development Control Administration Team via the contact details below.

For historic pre-Merton CIL S.106 monitoring information please see S.106 monitoring reports.  Monitoring information relevant to S.106, including affordable housing, will be provided in future Annual Monitoring Reports.

Contact us

Development Control
London Borough of Merton
Merton Civic Centre
London Road

Telephone: 020 8545 3777

This page was last updated on Thursday 3 November 2016

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