The New NPPF and the Implications for Section 106 Agreements

"affordable housing and infrastructure obligations must be factored into land value and scheme feasibility from the outset"

The revised National Planning Policy Framework (NPPF), published in August 2026, places a renewed emphasis on housing delivery, affordable housing provision and the use of planning obligations to secure policy-compliant development. It also introduces a clearer national framework for the use of viability review mechanisms, which is likely to have significant implications for developers, landowners and local planning authorities. 

A Greater Focus on Policy Compliance

Under the new DM5, viability assessments are intended to be the exception rather than the rule.  The idea is that as much of the viability assessment work as possible should be carried out when the council is drawing up its local plan The expectation is that landowners and developers should properly account for policy requirements, including affordable housing and infrastructure contributions, when acquiring sites. 

For councils, there is a greater emphasis on plan-making viability than the 2024 version, meaning that local authorities need to do more evidence-gathering work on contributions and likely costs.  Planning officers are now more likely to place greater reliance on adopted policy requirements when negotiating section 106 agreements. For new plans undertaking detailed viability assessments hopefully we will see a downward alteration in the quantum of contributions sought which is reflective of the current viability challenges in the market.

It is likely that there will be reduced scope for landowners and developers to reduce affordable housing due to site acquisition costs and greater risk to developers who have overpaid for sites on speculative assumptions as well as increased pressure to undertake detailed due diligence before purchasing land.   Landowners and developers will also be expected to engage at the local plan stage in a more meaningful way than in the past, particularly on strategic sites.

Viability assessments will also require significantly more evidence and justification before being accepted and receiving meaningful weight in the planning application process.

This approach is intended to provide greater certainty for local authorities and communities while supporting the Government's ambition to increase housing delivery. 

Formal Recognition of Review Mechanisms

A notable development is the NPPF's express support for the use of early-stage and late-stage viability review mechanisms where affordable housing provision is reduced on viability grounds. These reviews are intended to ensure that if market conditions improve, additional value can be captured and redirected towards policy-compliant affordable housing contributions. 

For developers, this means that agreeing a reduced affordable housing package at planning stage is less likely to provide finality. Future increases in sales values, reductions in costs or other improvements in scheme performance may trigger additional affordable housing requirements or financial contributions through the Section 106 agreement. 

For London schemes, the new NPPF approach broadly reflects the direction of travel already established through the London Plan's early-stage and late-stage review mechanisms but will now lead to wider adoption of similar provisions across England.

Model section 106 agreements

The revised NPPF signals a significant shift towards greater standardisation of planning obligations. 

New policy DM6(4) provides that, where national model planning obligations are relevant to a development, they should be used unless there are strong reasons for adopting an alternative form of agreement. This is a clear indication of the Government's intention to promote consistency and reduce the time and cost associated with negotiating planning obligations.

The policy sits alongside the Government's current consultation on model section 106 agreements for medium-sized residential developments, specifically sites delivering between 10 and 49 homes on areas of up to 2.5 hectares. The consultation seeks industry views on four standard templates and is due to close on 20 October. Given the direction of travel set by the NPPF, developers, landowners and local authorities would be well advised to review the proposed templates carefully and engage with the consultation process. There is a strong possibility that these model agreements will become the default starting point for medium-sized housing schemes in the future.

The potential advantages are obvious. Standardised agreements should help to streamline negotiations, reduce legal costs and provide greater certainty for all parties involved in the planning process. By removing the need to negotiate well-established provisions on every application, planning permissions may be issued more quickly, helping to accelerate housing delivery.

Conclusion

The 2026 NPPF marks a continuation of the trend towards securing full policy compliance through planning obligations and reducing reliance on viability-based reductions. For developers, the key practical consequence is that affordable housing and infrastructure obligations must be factored into land value and scheme feasibility from the outset. Where viability issues do arise, applicants should expect robust Section 106 review mechanisms designed to capture any future uplift in development value and redirect it towards affordable housing delivery.