Several years ago, during the dying embers of the last Government, I was invited into a roundtable with the then Housing Minister Rachel Maclean. Ostensibly to talk about encouraging SME housebuilding, I was more worried about long tail risk from the combinatory effects of pandemic cost inflation, interest rate hikes and Michael Gove’s then still fresh decision to mandate second stairwells into buildings over 18 metres.
Most the SME attendees were not in the same place as me. They were edge of settlement promotors. But at Pocket Living, where I was at the time, the portfolio of sites we had assembled were all urban, high density brownfield opportunities.
Gove’s second stairwell announcement a few months prior alongside rampant cost inflation had left us exposed. I and the team were already in emergency mode trying to protect our asset positions.
I was seeing the inhouse appraisals. They just didn’t stack. In fact, it was so bad that I concluded the ripples would be felt by everyone in brownfield development. My take: the industry was about to experience a gray rhino and it was going to take a large dent out of UK general supply if the Government didn’t act.
Moving around the table, many of the developers fell into the usual ‘casework’ scenarios griping about how long it takes to get planning or this and that about a District Council not behaving properly. The Minister looked sympathetic but swerved.
When it fell to me, my language was different. We were entering a brownfield emergency. Numbers were going to fall off a cliff and whilst I was in the minority in the room, I felt it was only a matter of time before people began to wake up.
The Minister paused, feigned affectation and then asked for recommendations. I had her attention perhaps because I was the only one not complaining about the local case officer.
My response: act fast and for material recommendations, take your cue from how past Governments navigated real estate development crises. Because, this was a impending crisis.
Ministers don’t need to be subject experts I volunteered, but studying past policy responses helps inform the present. The Brown Government and the previous Coalition Government brought in a swathe of measures recognising development economics had collapsed after 2008 and recovery needed clear interventions. One of these was particularly relevant for what was coming.
Section 106BA needed to come back and immediately. Otherwise, we would suffer the consequences of a brownfield housing collapse. There was silence in the room…
Section 106BA the moral case
The principle behind Section 106BA is simple: when market conditions materially change after planning obligations have been agreed, there needs to be a simple mechanism to revisit those obligations so schemes remain deliverable. It was designed for exactly this kind of environment. When statutory burdens, after-the-fact regulatory shifts or spiralling costs turn consented developments into uneconomic proposals, developers stop building. Obligations that look fair at the signing table become deal killers in execution.
This point was underlined by the Government’s u-turn on second stairwells in residential buildings over 18 metres — a mid-cycle and sudden change to safety rules that needed to be retrofitted onto designs long after land was bought and viability appraisals completed. Whatever the safety intentions, the operating rules were altered after financial commitments were made. That is not planning certainty; that is regulatory whiplash.
There is a moral argument here. If the state changes the rules in a way that materially increases costs or reduces net saleable area after purchase and design, it cannot simultaneously insist that all prior affordable housing commitments remain sacrosanct. That is not a fair allocation of risk. Moreover, it terrifies capital because investors will then ask what more damage can a Government do?
Recent work by Place Base underscores the scale of the impact of this disastrous public policy intervention. Their research Milton Keynes Lost analyses the effect of the second stairwell requirement on housing delivery. It finds that the government’s own impact assessment shows minimal safety benefits for buildings between 18–30 metres — a reduction in expected fatalities so small it equates to one death avoided every 6,153 years.
Yet the regulation imposes real design and cost burdens. Based on detailed industry interviews and modelling, the Place Base report estimates that homes delivered in buildings over 18 metres will be reduced by around 25 per cent as a direct result of the requirement. Applied nationally, this amounts to the loss of nearly 18,000 homes per year, equivalent over five years to a city the size of Milton Keynes.
These are not merely unbuilt homes on paper. If housing targets are to be met, this loss pushes development into lower-density alternatives or stalls it entirely. Place Base’s analysis suggests that developers are not redesigning within the new parameters — they are avoiding the requirement by reducing heights, losing density and cutting deliveries.
General supply: the Gray Rhino has now arrived
Molior’s latest data on London’s construction pipeline paints a parallel picture of the impending collapse. Between 2015 and 2025, private housing starts in London have slumped — down 84 per cent over the decade, from tens of thousands to only about 5,547 starts in 2025, compared with more than 33,000 in 2015. Forecasts suggest that by 1 January 2027 there will be just 15,000–20,000 homes actively under construction in Greater London — a fraction of the 60,000–65,000 typical in earlier cycles.
To put that in context, the Government’s own aspiration for London is in the order of 88,000 homes per year. Construction activity at 15,000–20,000 leaves the capital’s pipeline dramatically undercapitalised. And because construction starts now become completions later, decisions made today will shape housing outcomes well into 2027 and beyond.
In such a market, insisting that every Section 106 obligation stand untouched — regardless of changed conditions — ensures two things: stalled schemes and stalled delivery. We are witnesses a major decapitalisation of the sector just when it needs more capital than ever. Funders will not commit; lenders will not trust forecasts unsupported by sales; contractors remain cautious; and affordable housing obligations remain unrealised because the underlying permission never gets built.
Section 106BA does not automatically mean reducing affordable housing requirements across the board. It means testing viability against current market realities rather than historic assumptions. Yes, this can lead to lower contributions on a given site. But that is a choice only in the context of dynamic delivery. A reduced obligation on a scheme that gets built produces homes, affordable units and jobs. A larger obligation on a scheme that never starts produces nothing.
This is not a concession to developers as special interests. It is a recognition of market mechanics. Housing delivery — particularly in cities like London — relies on the interplay of early sales, finance availability and regulatory certainty. Molior’s data shows that lack of sales across price points has directly contributed to fewer starts and a depleted pipeline. Until that fundamental viability equation improves, tools enabling renegotiation are a necessary complement to traditional planning controls
At the same time, the Government appears willing to adopt the Mayoral flag ship policy of review testing any upside generated by a scheme that cannot deliver threshold levels of affordable housing. If such a policy remains, although I expect much watered down if policy makers have any commercial sense, 106BA is a useful complement. There is then upside and downside. At the moment it is all one way which make UKplc unattractive for capital market investment in residential development.
Given the scale of the challenge — with construction activity expected to contract sharply by 2027 — the real choice is not between purity and compromise. It is between compromise and contraction. That is what policy makers need to understand.
Section 106BA is not a panacea. But in a system sliding toward delivery collapse, it is a pragmatic lever that risks more homes rather than no homes. And in a market where the cost of doing nothing is a construction pipeline on life support, that is a lever worth pulling.
Back to the roundtable
The silence was eventually broken by the Minister looking over her shoulder. Seated on her right was her Private Secretary and behind her was a team of youngish looking policy officers. The Minister did not know what Section 106BA was. But it became apparent nor did any of the Civil Servants. The discussion moved on. The gray rhino padded closer.
