Planning & Development

Planning Viability UK — NPPF Framework, Section 106 Negotiations, and CIL Exemptions

Covers the NPPG standardised residual appraisal methodology, benchmark land value (BLV), s.106 viability negotiation and review mechanisms, s.106A/B modification, CIL exemptions, and the Housing Delivery Test.

20 min readUpdated 8 June 2026Last reviewed: 17 May 2026planning-viabilitysection-106affordable-housingcil

NPPF Viability Framework and the NPPG Methodology

NPPF para 57 presumes policy-compliant applications are viable; a viability assessment is only required where the applicant seeks to provide less than the full policy-level obligations. The NPPG (updated 2019) standardises the residual land value (RLV) method: GDV minus all costs minus developer profit equals RLV. RLV is compared to benchmark land value (BLV = existing use value plus a landowner premium). Where RLV exceeds BLV the scheme is viable at the full obligation level. Parkhurst Road [2018] confirms the publication requirement.

The Residual Appraisal — GDV, Costs, and Developer Profit

GDV: total sales receipts or capitalised income. Build costs: BCIS-based rates adjusted for location and abnormals. Professional fees: 10-15% of build costs. Finance: 6-8% on land and build during the development period. Developer profit: 15-20% on GDV for market housing (NPPG guidance); 6% on cost for affordable. BLV: EUV plus 10-20% landowner premium (NPPG). RLV = GDV minus (costs plus profit). If RLV falls below BLV, obligations must be reduced.

Section 106 Viability Negotiation and Review Mechanisms

Local Plans set affordable housing policy requirements (typically 20-40% on sites above 10 units). Where the full requirement is unviable, the LPA must accept a reduced level. Viability review mechanism clauses allow the LPA to recapture profit uplift at key milestones. s.106A allows modification where market conditions have changed post-grant; s.106B gives a right of appeal to the Planning Inspectorate if the LPA refuses modification.

CIL Exemptions and the Housing Delivery Test

CIL exemptions: self-build homes and extensions up to 100 sq m; social housing (CIL Regs 2010 — claim before commencement); exceptional circumstances relief where CIL itself renders development unviable; charity relief. Housing Delivery Test: LPAs delivering below 75% of housing target trigger the presumption in favour of sustainable development; below 25% adds a 20% buffer to the 5-year land supply requirement — making planning appeals for housing more likely to succeed.

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Hand-picked by topic overlap with this guide.

Section 106 Agreements (TCPA 1990 s.106) · Condition on Planning Permission · Affordable Housing (20-40%; On-Site or In-Lieu) · CIL (Fixed Per-sqm Levy; Cannot Duplicate with s.106) · Three-Test Rule (Necessary; Related; Proportionate) · Viability Assessment (Residual Land Value; NPPF Para 57) · Binds Successors (Local Land Charge) · Modification/Discharge: s.106A After 5 Years · Scotland: s.75 Agreements

Section 106 Planning Obligations — Affordable Housing, CIL, Viability Assessments, Successors in Title and Scotland Section 75

Section 106 planning obligations are legally binding agreements between a local planning authority (LPA) and a developer or landowner as a condition of granting planning permission. They are used to make development acceptable where it would otherwise fail planning policy — typically by requiring affordable housing contributions or infrastructure payments. The affordable housing obligation (20-40% of new residential units above the site threshold, typically 10+ units in urban areas) is the most financially significant. CIL (Community Infrastructure Levy — Planning Act 2008) is a separate fixed levy charged per square metre of new floorspace that cannot duplicate s.106 infrastructure funding (CIL Regulation 122). Every s.106 obligation must pass three tests: necessary; directly related to the development; fairly and reasonably proportionate in scale. Viability assessments (residual land value calculation — NPPF para 57) allow developers to challenge unviable s.106 requirements. s.106 obligations bind all successors in title (registered as local land charges — discoverable on LLC1/CON29). Modification or discharge after 5 years under s.106A (TCPA 1990); appeal to Planning Inspectorate. Scotland: s.75 agreements under TCPA(Scotland) 1997; same principles; CIL not introduced in Scotland.

CIL — Planning Act 2008 s.205-225

Community Infrastructure Levy (CIL) — Rates, Self-Build Exemption, MCIL London, Social Housing Relief and CIL vs Section 106

The Community Infrastructure Levy (CIL) is a mandatory non-negotiable planning levy charged by local planning authorities (LPAs) on most new development in England and Wales that creates net new Gross Internal Area (GIA) exceeding 100 sqm, or any new dwelling regardless of size. Key aspects: (1) CIL rates are set in each LPA's CIL Charging Schedule (£/sqm); rates range from £0 to £500+/sqm; (2) MCIL (Mayoral CIL — London): GLA charges £25/sqm for residential development (£80/sqm in Central Activity Zone and Isle of Dogs) and £60/sqm for offices/hotels/retail on top of LPA CIL; (3) self-build exemption: single dwelling for applicant's own main residence — claim MUST be filed before development commences; 3-year occupation requirement; clawback (full CIL + 20% surcharge) if sold within 3 years; (4) social housing relief (Reg 49 CIL Regs): affordable housing managed by a registered provider or subject to 250-year s.106 obligations relieved from CIL; (5) CIL vs s.106: CIL is mandatory, non-negotiable and pooled for general infrastructure; s.106 is negotiated for site-specific obligations; both can apply; (6) surcharges for non-compliance: 20% for failure to submit Commencement Notice before starting development; 5-15-20% for late payment.

Planning Law

Change of Use Planning UK — Use Classes, HMOs, and Short-Term Lets

How the Use Classes Order and permitted development rights govern residential-to-HMO conversions, commercial-to-residential prior approval, and the new Use Class C5 for short-term lets.

Planning Law

Planning Enforcement UK — Enforcement Notices, Limitation Periods, and Defending Breaches