Doncaster Council rubbishes think tank's claims that rising building costs will hit social housing developments

The New Economics Foundation (NEF) said that councils like Doncaster would not be able to secure social housing units due to rising costs and lower property prices meaning that developers would not be financially viable to provide them through a Section 106 agreement.

Section 106 agreements are where builders agree to provide social housing units and other amenities like green space and school places in return for planning permission on big applications.

The think tank’s analysis outlined that with a 20 per cent increase in the cost of building materials and DMBC’s out policy of developers having to provide 23 per cent of affordable housing within any application plan, this would wipe out S106 contributions making them unviable.

The NEF said that DMBC secured zero social housing units during 2019/2020 but council bosses said this was ‘incorrect’ and that 17 homes were gained and built in this time frame.

Council bosses added that during 2020/2021, DMBC had 45 S106 homes completed and within the first six months of 2021/22, a further 43 S106 homes were completed.

In addition, they also said Doncaster’s own council house build programme is anticipated to deliver 500 new homes over the period between 2020 and 2025.

Council bosses also noted that the materials cost rise of 20 per cent ‘did not reflect the overall build cost increase of a home’ which is said to be around generally five to six per cent.

Selling prices in Doncaster have however also risen from an average of £160,000 in 2019 to £165,000 in 2020 and £181,000 in 2021, ‘more than offsetting much of the narrowing of viability gap’ DMBC housing chiefs said.

Deputy mayor Coun Glyn Jones, cabinet member for business and housing, said: “Doncaster has an ambitious and affordable housing delivery programme as set out within our recently approved 2020 -2025 Housing Delivery Plan.

“The borough has significant commitments via the planning system from house builders and registered providers to S106 delivery.

There are agreements in place where the council will acquire 540 homes through the S106 process between 2021-25 and a further pipeline of 335 committed homes between 2025 and 2030.”

“It is anticipated that this number will increase as more S106 Agreements are agreed due to the recently adopted Local Plan.”