Self build in Devon with a S106

[cyndiheimsarac]

Hello all!

 

Myself and my partner have just after a bit of a battle been granted planning permission for our family home, we are subject to a s106 under the affordable housing rules (which still makes no sense to us). So we will only be able to sell our home in the future for 80% of its value and it must first be offered to the local community!

 

I am hoping for some advice from you all, what should our immediate steps be now? the 106 is being drafted and we have the legal side of that done. But what do we do now? any help/advice/suggestions would be very very appreciated. 

 

Cyndi 

[Temp]

That sucks. First task is to work out if the project still makes financial sense. For example if the finished house would be worth £400k on the open market then you could only sell it for 80% = £320k. Will it cost you more than £320 to build including land? Run you own numbers remembering to add a contingency.

 

What does your mortgage company say? I mean they typically lend a fixed percentage of the finished value, but your finished value just dropped to 80%. Will they still lend you enough? Will they lend at all?

 

Some council's want builders to pay cash to the council instead of restricting future sale price of the house. That might be a better option for you depending on the amount and if you can persuade the council to accept it.

 

This might be of interest if your house is going to be expensive even after the S106 condition is applied..

 

https://www.owendevenport.co.uk/index.php/planning-appeals-case/318-section-106-affordable-housing-restriction-removed-at-appeal

Edited January 17, 2020 by Temp

[Temp]

Actually that last link might be out of date. It seems the government might have removed the ability to appeal s106 affordable housing obligations some years back..

 

https://www.clarkewillmott.com/news/last-chance-to-challenge-section-106/

[cyndiheimsarac]

Thank you for that, the land was a gift so we feel like it it still worth doing. They have confirmed it will be the sale price that gets affected, they are not interested in us paying any cash sadly. 

 

The mortgage company say that they are seeing this more and more, especially in certain areas (i suspect there are a few planners out there who favour this route!) so they are not perturbed by it. 

 

They will still lend as the house with conservatively be worth more than we pay to build it (even factoring in the loss of 20%). I have attached plans! 

 

 

concept 1.pdf concept 3.pdf concept 4.pdf concept 5.pdf

[Ralph]

On 17/01/2020 at 20:08, Temp said:

Actually that last link might be out of date. It seems the government might have removed the ability to appeal s106 affordable housing obligations some years back..

 

https://www.clarkewillmott.com/news/last-chance-to-challenge-section-106/

I think there has been some back and forth on this but I still thought you could apply for an exemption if the house was your primary residence for three years or more.

[Temp]

It might be worth finding out if it's worth appealing. For example if a lot of houses have been built in the area covered by the council recently and many have S106 for the same reason it might be possible to argue the need for more has changed since the policy was written. Depends if you want to gamble a bit on a planning consultant in the hope of getting it removed. You might be able to get and initial opinion quite cheaply.

[cyndiheimsarac]

We did use a planning consultant to appeal the 106 at committee but did not get anywhere, as this is going to be our family home we have accepted the 106 and believe that they be an opportunity in the future to overturn it should things change. 

 

Now we are just focusing on building and the next steps, does anyone know if it makes sense to use a QS to tender or whether it is best when just building one house to reach out to potential builders yourself?