Thousands of Section 106 Affordable Homes Risk Remaining Empty

Research published by the Home Builders Federation (HBF) has revealed that around 8,500 affordable homes due to be built in the next year could stand empty because developers are struggling to find Registered Providers (RPs) willing to acquire them.

Under Section 106 (s106) legal agreements, housebuilders are required to provide a proportion of new homes as affordable tenures in exchange for planning permission. These homes are usually purchased by housing associations, with 44% of all affordable homes in 2023/24 delivered through s106 obligations.

However, many developers now face difficulty securing RPs to take on these homes, resulting in delays, cashflow challenges and stalled sites.

An HBF Freedom of Information request to local authorities found that:

• Around 900 completed affordable homes remain unsold;

• Approximately 8,500 affordable units currently being built or due to start soon are not under contract with an RP; and

• More than 700 residential sites have been delayed or stalled in the past three years due to this issue.

While these figures are lower than the 17,000+ uncontracted homes identified in the HBF’s 2024 survey, that earlier data covered a longer timeframe. The HBF warned that the latest findings “confirm that the short-term delivery outlook remains highly concerning.”

The situation is said to be placing particular pressure on small and medium-sized developers, who rely on the timely disposal of affordable homes to maintain liquidity.

HBF Chief Executive Neil Jefferson commented:

“Against rising affordability pressures and increasing numbers of families living in temporary accommodation, it cannot be that affordable homes are left standing empty. Right now, an estimated 100,000 private units are stalled, threatening the supply of much-needed homes and the livelihoods of regional businesses and tradespeople across the country.”

Commentary

This growing problem underlines a critical weakness in the way affordable housing is currently delivered. With the majority of affordable homes secured via Section 106 agreements, the sector faces increasing uncertainty when RPs are unwilling or unable to purchase units due to rent caps, funding constraints or build-cost inflation.

For planners and developers alike, it highlights the importance of early tenure strategy discussions, flexibility in s106 negotiations, and the potential for alternative delivery models—including local authority direct purchase or discounted market sale options—to maintain delivery momentum.