Question to the Department for Levelling Up, Housing & Communities:

To ask the Secretary of State for Levelling Up, Housing and Communities, what recent estimate he has made of annual profits of housing developers; and what assessment he has made of the potential merits of increasing section 106 thresholds.

The department has compiled the data based on published reports in the table below, this shows the profits developers made over the last three years.

** *Profit in 2020 would have been affected by Covid

Local planning authorities use the Community Infrastructure Levy (CIL) and Section 106 planning obligations (together called ‘developer contributions’) to capture a proportion of the increases in land value that occur as a result of planning permission being granted. There are a range of estimates for the amount of land value uplift currently captured, from 25 to 50 per cent, and in 2018-19, £7 billion was agreed through developer contributions.

However, the existing developer contributions regime is discretionary, subject to negotiation and renegotiations based on developers’ viability assessment.

Over 80% of local authorities consider that Section 106 planning obligations create a delay in the granting of planning permission, and over 60% believe that this slows development completion.

The Government has proposed to introduce a new ‘Infrastructure Levy’, to replace the existing system of developer contributions, which aims to capture a greater share of the uplift in land value that comes with development. Through the Levy, local authorities will have greater flexibility to determine how contributions are spent to shape and support both existing and new communities.