What does Section 76 mean for home builders and developers in Northern Ireland?

The Northern Irish equivalent of Section 106 planning agreements, Section 76, designed to ensure affordable housing in developments, is set to become much more frequently used from next year. Gravis Planning’s Chris Bryson and Wilson Nesbitt’s Drew Nesbitt examine the likely impact

This year marks 30 years since the start of Section 106 in England and Wales. It is now an integral part of how development and planning takes place and it is hard to imagine the planning process without discussions of Section 106. Its equivalent in Northern Ireland, Section 76, is 23 years younger and less frequently used, but that’s about to change next year.

Following the preparation of new local development plans in all of its 11 boroughs, Northern Ireland will see a substantial increase in the use of Section 76 agreements, coinciding with the maturing of the development market for the area. ‘North Ireland.

Emerging policies in new local development plans will mean that all housing development schemes of a certain size will need a planning agreement that adheres to the requirements of the Affordable Housing Policy. This dramatic change will likely cause some start-up issues, but it is essential to ensure continued local economic success.

Once in place, the Northern Ireland housing market could suffer a significant impact of up to 20% on existing schemes and costs, leaving many developers to decide who bears the costs, themselves or home buyers. home ?

It could also become a double-edged sword for homebuyers, first-time buyers, key workers and low-income families to reap the benefits, and other homebuyers absorbing the projected rise in house prices.

How will section 76 work in practice?

Once the policy is fully implemented, each council will set its own requirements and thresholds, but they will likely work in the same way as Belfast City Council, which adheres to the HOU5 policy.

Belfast’s threshold is that developments of more than five units will require a planning agreement where 20% of those homes offer affordable housing options, providing more opportunities for first-time buyers, key workers and low-income families. The HOU5 policy also states that affordable housing will be secured through a Section 76 agreement, which should be in place before planning permission is granted.

While some large homebuilders and developers may be accustomed to some financial commitment to local government, the real pressure will be on small and medium-sized developers, as they may not have had to consider before affordable housing costs or a financial setback from the local government. advice.

When does the change officially take effect?

Although the change will not come into full effect until 2023, some developers are already experiencing pushback from the local council due to Section 76, particularly in Belfast, where the council applies Section 76 as a that draft policy.

This is why it is vital for any builder or developer of any residential project to be aware of changes so that they can meet new requirements, factor in additional costs and plan accordingly, as even those who are in planning or submitting from now are likely to be assessed against new affordable housing policies and the need for Section 76 agreements.

In fact, we are already seeing cases of property developers who have been forced to reconsider their plans to comply with affordable housing policies and meet Section 76 requirements, despite their planning applications being well advanced. The result of this left developers facing higher costs, in some cases as much as a six-figure increase, and in the worst case opting out of their plans altogether as a result.

That’s why it’s important for homebuilders and developers to be aware of the change, as they may need to revise their plans if they are to start expanding this year and in the years to come. Taking into account the additional requirements and costs, they will still be able to make the most of the current flowering opportunities that Northern Ireland has to offer.

Since the pandemic, Northern Ireland has seen a unique generational opportunity for businesses and homebuilders. Due to travel restrictions due to the coronavirus, young people who have completed their university studies in Northern Ireland have stayed put and have been encouraged to settle there, establish their careers, enjoy the proximity of their families and enjoy work-life balance. of which Northern Ireland boasts.

Unlike in previous years, there are now more job opportunities available in Northern Ireland than ever before, particularly in Belfast, which has seen the expansion of global companies such as PwC. Northern Ireland has also been named Europe’s top cybersecurity destination, with international companies such as Black Duck Software, WhiteHat Security, Rapid 7, Proofpoint and Alert Logic establishing operations across the city.

On top of that, the city is seeing huge investment from Belfast’s two major universities, who plan to revitalize Belfast with student accommodation, making Northern Ireland’s appeal even more appealing to younger and older people. educated.

Chris Brison

Section 76, Northern Ireland, builders and property developers
Chris Bryson.

Director, Planning

Gravis planning

Tel: +44 (0)28 9042 5222

[email protected]

www.gravisplanning.com

LinkedIn: Gravis Planning

Instagram: @gravisplanning

Drew Nesbitt

Section 76, Northern Ireland, builders and property developers
Drew Nesbitt.

Partner

Wilson Nesbitt

Tel: +44 (0)28 9032 3864

[email protected]

www.wilson-nesbitt.com

LinkedIn: Wilson Nesbitt

Facebook: Wilson Nesbitt Solicitors

Instagram: @wilsonnesbittsolicitors