Thousands of affordable homes could be left standing empty

Poor take-up of Section 106 housing stock could delay the occupation of around 8,500 affordable homes due for completion by the end of 2026.

The Section 106 push-back has also impacted private housing, with 700 developments experiencing delays in the last three years, according to figures from the Home Builders Federation (HBF).

“An estimated 100,000 private units are stalled, which not only threatens the supply of much-needed homes but also risks the livelihoods of regional businesses and hardworking tradespeople up and down the country,” said Neil Jefferson, HBF’s Chief Executive.

Demand drops for Section 106 housing 

Under Section 106, new housing developments must include a specified number of affordable homes, which are purchased by registered providers, such as housing associations, at a reduced price.

Over the last decade, Section 106 has become the main source for delivering affordable homes – but not any more. Demand for Section 106 homes has declined as cash-strapped registered providers focus their efforts on investing in existing properties and exploring grant-funded options in a bid to supply more social housing. 

Scheme to clear backlog gets off to a slow start

The alarm bells were already ringing last year when a survey revealed that 53% of housing associations were either no longer intending to buy Section 106 homes or had reduced their requirements. This trend is set to continue, with less than a third of future affordable housing predicted to come from Section 106 agreements compared with around 50% over the last five years.

Homes England has launched a new service to try to clear the backlog of uncontracted and unsold affordable housing. The scheme enables developers to share details of affordable private homes still waiting for a buyer with councils and registered providers.

Although more than 200 potential buyer organisations signed up to the service in the first 50 days, less than 10% of an estimated 17,400 uncontracted Section 106 homes had passed through the scheme as of July 2025. 

Plans to build new towns and houses at risk

The National Audit Office has warned that the Section 106 challenges could jeopardise the government’s five-year plan to build 1.5 million new homes. The New Towns Taskforce’s recommendations for 12 new towns could also be derailed. Each site is expected to have a least 10,000 new homes, with an aim for 40% to be affordable.

With the government hoping to start work on at least three potential new towns in the current parliament, the construction industry is calling for greater acceptance of the use of cascade mechanisms in Section 106 agreements. This could help to prevent entire developments being delayed and allow unsold affordable homes to be recategorised as a last resort. 

“As it stands, housing associations are unable to bid and private buyers unable to buy, leaving the housing outlook increasingly uncertain,” warned Jefferson.