As the CEO of L&Q Housing and Chair of the G15, representing London‘s largest not-for-profit housing associations, I am concerned that affordable homes are sitting empty across the capital — even as our city remains desperately short of truly affordable housing.
Why is this happening? Housing associations are unable to purchase these Section 106 properties due to high costs, design choices on the size or type of property made without our input, and impractical features that make them unsuitable and unaffordable for those who need them most.
For those unfamiliar, Section 106 is a legal agreement between developers and local authorities. It’s intended to ensure that new developments contribute positively to the community by including affordable housing and other public benefits.
In theory, it’s a noble concept: developers build, communities benefit, and not-for-profit housing associations like ours buy and manage the affordable units to meet local needs.
However, in practice, the system isn’t working as intended and is failing to effectively serve those it aims to help. So, how is Section 106 supposed to work? When a developer plans a new project, they negotiate with the local authority to include a certain percentage of affordable housing. These homes are then usually sold to housing associations at a discounted rate, allowing us to offer them to residents at affordable prices.
But it has all gone wrong because developers often involve us — the not-for-profit housing associations — too late, typically after they’ve secured planning permission and bought the land. By then, critical decisions about design, layout, and the mix of housing types have already been made without our input or any real consideration for the needs of future residents.
This approach results in homes that don’t meet community needs. We end up with a surplus of one-bedroom flats in the affordable segment, while families are in need of larger homes with space for their children. High service charges make these homes “affordable” in name only and adversely affect mortgage availability because lenders see the high costs as increasing buyers’ financial burden, making loans riskier.
Under the Conservative Party government, sixteen Housing Ministers have had the opportunity to fix this issue but were replaced or moved on before addressing it. This has deepened the housing crisis, leaving thousands without the homes they desperately need. In one of the world’s wealthiest cities, bureaucratic inefficiency and misplaced priorities are preventing people from securing housing.
Immediate reform of Section 106 is desperately needed. To start with, housing associations want to work with developers from the very beginning or a project. By collaborating early, we can ensure that homes are designed and built to meet real community needs — appropriate sizes and reasonable pricing.
The Government should also recognise the unfair financial burden placed on not-for-profit housing associations. We’re doing critical safety work without financial support, as we – unlike for-profit developers – don’t have full access to the Building Safety Fund that was introduced to fund critical fire safety works on cladding after the Grenfell Tower fire. Financial constraints are forcing us to cut back on new developments so we can divert the majority of our resources to addressing the safety needs of our residents.
This is counterproductive and hinders our mission to provide affordable and social homes. Moreover, grant funding should be strategically allocated to increase the supply of affordable housing, not to fudge housing targets. Innovative solutions are needed, such as allocating portions of land directly to housing associations. We are mature developers in our own right and this would allow us to build homes that meet local needs and remain genuinely affordable.
The clock is ticking, and the housing crisis isn’t waiting. Effective collaboration between developers, housing associations, and local authorities isn’t just a nice idea — it’s essential. The Labour Party must step up, ensure resources are allocated fairly where they’re needed most, and reform policies that currently hinder rather than help.
Section 106 has the potential to be a powerful tool, but only if it’s reformed to serve everyone involved fairly. The new Government must prove it’s serious about tackling the housing crisis and delivering the 1.5 million homes it promised the British people across this Parliament. Without decisive action we’ll continue to see empty homes and shattered hopes — a stark indictment of a system that’s failed its people.