Section 106 and Affordable Housing: What Councils Need to Track

Affordable housing is typically the most valuable obligation in an S106 agreement — and the most complex to monitor. A 200-unit scheme with 35% affordable housing represents millions of pounds of housing delivery. Getting the tenure mix wrong, missing the delivery trigger, or accepting substandard units creates problems that are expensive and politically difficult to fix.

This guide covers the specific data points planning teams need to record and monitor for S106 affordable housing obligations.

This covers England only. This is general guidance, not legal advice. Affordable housing policy varies by local plan area.

What S106 Affordable Housing Obligations Typically Require

Under the National Planning Policy Framework, major developments (10+ units or sites of 0.5+ hectares) are expected to contribute to affordable housing delivery. The specific percentage and tenure mix are set by your council's local plan, but a typical S106 affordable housing obligation includes:

• Number of units — usually expressed as a percentage of total units (e.g. 30%, 35%, 40%)
• Tenure mix — the split between social rent, affordable rent, shared ownership, First Homes, and any other intermediate products
• Delivery trigger — when affordable units must be built and transferred (e.g. "before occupation of 50% of market dwellings")
• Registered provider — named in the agreement or subject to council approval
• Size mix — number of 1-bed, 2-bed, 3-bed units (to match local housing need)
• Location on site — where affordable units are positioned (to prevent clustering)
• Design standards — affordable units must be indistinguishable from market units
• Mortgagee exemption clause — standard clause allowing a mortgagee in possession to sell market units if the registered provider defaults

The Five Monitoring Data Points

1. Delivery Trigger Status

The delivery trigger is your primary monitoring mechanism. Common trigger wordings:

• "No more than [X]% of the Market Dwellings shall be Occupied until [all / a proportion] of the Affordable Dwellings have been Transferred to the Registered Provider"
• "Prior to the Occupation of the [Nth] Market Dwelling"
• Phase-specific triggers on larger schemes

What to track:

• Trigger milestone (which occupation count or phase completion)
• Current build progress (how many market dwellings are occupied)
• Whether the trigger point has been reached
• Whether the affordable units have been transferred

Common problem: Developers occupy market dwellings past the trigger point before affordable housing is delivered. By the time the planning team notices, it's a breach — and enforcement action is retrospective and slow. Monthly checks of building control completion data against your S106 trigger register catch this early.

2. Tenure Mix Compliance

The agreement specifies the tenure split. The delivered units must match.

What to check:

• Social rent units delivered match the agreement count
• Affordable rent levels are at the agreed percentage of market rent (usually no more than 80%)
• Shared ownership units match the agreed terms
• First Homes are priced at the required discount (minimum 30% below market value, capped at £250,000 outside London)

Common problem: Registered providers may deliver all units as affordable rent rather than the specified mix of social rent and shared ownership. This is commercially rational for the RP but doesn't match the agreement. Check the tenure of completed units against the schedule — don't assume the RP has followed the S106 terms.

3. Size Mix Delivery

The agreement usually specifies a unit size mix to match local housing need:

Unit Size	Agreement	Delivered
1-bed	8
2-bed	12
3-bed	6

What to track: Record the size of each delivered unit and compare against the schedule. Developers sometimes substitute larger units for smaller ones (or vice versa) during construction. The housing team should verify the delivered mix against the agreement before accepting the units.

4. Commuted Sums (Off-Site Contributions)

Where on-site affordable housing delivery is not feasible (viability, site constraints, or policy allows), the S106 may require a commuted sum — a financial contribution in lieu of on-site units.

Commuted sums are calculated using a formula specified in the agreement or your council's SPD. The typical basis is the difference between open market value and affordable value of the units that would have been provided.

What to track:

Field	Details
Commuted sum amount	Per formula in agreement
Indexation	Usually index-linked — apply at payment date
Payment trigger	Often tied to commencement or occupation threshold
Receipt date	When the council receives payment
Spend-by period	Clawback clause terms
Allocation	Which affordable housing project the money funds

Commuted sums follow the same financial tracking process as any S106 financial contribution — but the amounts are typically large (£100,000+), making deadline management critical. See S106 Spend Deadlines: What Happens When Developer Money Expires for the full deadline management process.

5. Cascade Clauses and Viability Reviews

Many S106 agreements include cascade clauses that reduce the affordable housing obligation if the developer can demonstrate the scheme is unviable at the agreed percentage. These typically work in stages:

1. Full obligation (e.g. 35% affordable housing)
2. First cascade: reduced percentage or altered tenure mix
3. Second cascade: commuted sum in lieu of on-site delivery
4. Final cascade: no affordable housing (rare — usually requires independent viability assessment)

What to track:

• Whether the developer has triggered a viability review
• Independent assessor appointment and terms of reference
• Outcome of the review (accepted / rejected / modified)
• Revised obligation terms (if modified)
• Review period (some agreements allow viability to be re-tested at defined intervals)

Cascade clauses need attention because they can reduce the affordable housing delivery significantly. The planning team should be aware of any viability review before it concludes — not after the developer has already proceeded with a reduced obligation.

Coordinating with Your Housing Team

Affordable housing monitoring crosses team boundaries. The planning team manages the S106 agreement. The housing team manages the relationship with registered providers and monitors delivery against local housing need.

Establish clear responsibilities:

Task	Owner
Recording the S106 affordable housing obligation	Planning (obligations officer)
Monitoring delivery trigger against building control data	Planning
Verifying tenure and size mix of delivered units	Housing
Confirming RP transfer completion	Housing
Tracking commuted sum receipts and spend	Planning + Finance
Reporting affordable housing delivery in IFS	Planning

The housing team needs to know the trigger point and the agreed specification before the trigger is reached — not when you ask them for IFS data in November.

For setting up monitoring for new agreements, use the S106 Agreement Checklist Generator — select "Affordable Housing" to get a tailored checklist.

For the full monitoring workflow that covers affordable housing alongside all other obligation types, see The Complete Guide to S106 Monitoring for Planning Officers.

Sources

• National Planning Policy Framework
• Town and Country Planning Act 1990, Section 106
• GOV.UK — Planning Obligations Guidance
• PAS — Infrastructure Funding Statements