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Clause 5 - Modification or discharge of affordable housing requirements

Part of Growth and Infrastructure Bill – in a Public Bill Committee at 10:30 am on 27th November 2012.

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Photo of Nick Raynsford Nick Raynsford Labour, Greenwich and Woolwich 10:30 am, 27th November 2012

My hon. Friend makes a good point, but there is actually a more fundamental problem, which is that the viability argument could entirely destroy the whole basis of the policy. That basis is confidence on the part of the landowner that when a site is made available below market value, there will not be a windfall gain at some future date to someone who simply happens to be the lucky occupant at that time. The section 106 agreement, which guarantees in perpetuity that the site will remain available only for defined needs, essentially depresses the land value in the long term.

My hon. Friend makes the good point that removing a section 106 agreement would ultimately open up the market to higher values and so be self-defeating, but it would be even more self-defeating in totally destroying the confidence of landowners who currently believe that they can make sites available at less than market value for good social and economic reasons for their area. It may then be that, as a result of a whim at a future date, someone will gain a windfall, but the policy will be destroyed. Of course, the impact of that will inevitably be to take away any confidence whatever on the part of landowners that it is worth their while disposing of sites at below market value in the interests of meeting the needs of their community. Why should they do so if someone else is going to get a windfall gain at some future date, over which they have no control?