The Section 106 Clearing Service, launched by Homes England, has quickly gained traction as a vital platform for matching affordable housing obligations with registered providers. With nearly 300 registrations in the first 50 days, the service is proving that there is strong demand from housing associations for acquiring S106 affordable homes.
However, despite this high level of interest, a key challenge remains: bid levels from housing associations are not aligning with housebuilders’ expectations, creating a disconnect that threatens the delivery of much-needed affordable homes.
Demand Is Not the Problem – Viability Is
Commenting on the early impact of the clearing service, Ryan Blair, Founder of Highlight Housing, noted:
“With 300 registrations in the first 50 days, the issue isn’t demand from housing associations. The real challenge is that housebuilders are not receiving the bid levels expected, making the delivery of S106 obligations appear unviable.”
This highlights an ongoing concern in the affordable housing sector – rising development costs, land values, and financial pressures on housebuilders are leading to higher expectations on S106 disposal values, while housing associations face financial constraints due to rent caps, borrowing costs, and operational challenges.
Bridging the Gap: How the S106 Clearing Service Can Help
The S106 Clearing Service was introduced to create a more transparent and efficient market for affordable housing transactions. By providing a structured platform where housebuilders can list available S106 homes and registered providers can express interest, the service aims to remove barriers and speed up transactions.
To make this work effectively, a balance must be struck between housebuilders’ price expectations and housing associations’ financial viability. This requires:
✅ Greater flexibility in bid expectations – Housebuilders must adjust pricing strategies to reflect the financial realities of housing associations.
✅ Additional funding mechanisms – Exploring grant funding, public-private partnerships, or Homes England interventions could improve financial viability.
✅ Better communication between parties – Encouraging direct engagement between housebuilders and registered providers to align expectations and improve deal structures.
What’s Next for the Section 106 Clearing Service?
If housebuilders continue to hold out for higher bids, there is a risk that S106 obligations will be left undelivered, impacting overall affordable housing supply. To maximise the potential of the clearing service, Highlight Housing supports collaborative efforts that bring together housebuilders, registered providers, and policy makers to ensure fair pricing and sustainable delivery.
With the right approach, the S106 Clearing Service has the potential to become a game-changer for unlocking stalled sites, streamlining transactions, and ultimately delivering more affordable homes to those who need them most.
📩 Get in Touch
If you’re a housebuilder or housing provider looking for support in navigating S106 transactions, Highlight Housing can help. Contact us today to explore how we can bridge the gap and facilitate viable, sustainable deals.
🔗 Find out more about the S106 Clearing Service
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