Standardising Section 106 agreements for medium-sized developments - What does the government propose?

The Government's proposals

On 25 August 2026, the Ministry of Housing, Communities and Local Government (MHCLG) launched a consultation on four standardised Section 106 templates for medium-sized housing developments in England. Under the 2026 National Planning Policy Framework (NPPF), medium-sized development is defined as housing schemes comprising 10 to 49 homes (inclusive) on sites of up to 2.5 hectares.

The four draft templates are:

1. A bilateral Section 106 agreement, incorporating standard clauses and schedules for financial contributions and the local authority's covenants.

2. A unilateral undertaking, with standard clauses and a schedule for financial contributions.

3. An affordable housing schedule for developments with full planning permission, including a discretionary cascade mechanism.

4. An affordable housing schedule for developments with outline planning permission.

The intention is to provide a consistent starting point for negotiations, reducing the need to draft standard provisions from scratch. The templates are not intended to remove the need to consider site-specific circumstances, and the Government recognises that obligations must remain appropriate to the development concerned.

Potential benefits

The proposals are intended to address the delays, inconsistencies and costs associated with negotiating Section 106 agreements. Requirements and drafting approaches can vary considerably between LPAs, creating additional work for developers operating across different areas.

A more consistent approach could reduce legal costs and negotiation time, giving developers greater certainty when assessing the viability and delivery of schemes. This may be particularly beneficial for small or medium sized enterprises, which often have fewer resources to manage lengthy legal negotiations.

LPAs could also benefit from spending less time negotiating standard provisions, allowing resources to be directed towards more complex or site-specific matters.

The proposed affordable housing cascade mechanism is another notable feature. It is intended to provide LPAs with a discretionary mechanism to help address practical difficulties in securing affordable housing delivery, while retaining the focus on delivering affordable homes.

Importantly, the August 2026 NPPF provides that national model planning obligations should be used where relevant, unless there are strong reasons to use a different obligation. This gives the proposals added significance, although the cascade mechanism remains discretionary.

What happens next?

The MHCLG consultation on standardised Section 106 templates for medium-sized housing developments closed on 20 October 2026, and the Government has confirmed that responses are still being considered. It is anticipated that we will have further clarity on the consultation responses early in 2027.

The proposed templates represent a potentially important step towards making Section 106 negotiations more efficient and predictable. Their ultimate effectiveness, however, will depend on how consistently they are adopted and how successfully they accommodate the practical requirements of individual developments.

For more information or advice, please get in touch with Zachary Martin-Taylor in our Planning and Infrastructure Team