Half of Rural Affordable Homes Could Be at Risk Under England Planning Rule Changes

Thousands of affordable homes in rural England could be lost over the next decade if the government moves forward with proposed changes to planning rules, according to new analysis from the National Housing Federation (NHF).

The government is considering relaxing long-standing planning requirements that currently require developers to include affordable housing in residential developments of between 10 and 49 homes. Instead of building affordable homes within these projects, developers could be allowed to make financial contributions to local councils, which would then use the money to support affordable housing elsewhere.

However, the NHF warns that this change could have significant consequences for rural communities. Its analysis of government data suggests that more than half of all affordable homes built in England’s most rural areas come from developments of this size. If the proposed reforms are introduced, the federation estimates that around 32,000 affordable homes could be lost over the next 10 years.

Kate Henderson, Chief Executive of the National Housing Federation, said rural communities are already facing severe shortages of affordable housing. She warned that removing the current requirement would make it even harder for local families to remain in the communities where they grew up, while increasing housing waiting lists, homelessness, and workforce shortages in essential services such as schools and local businesses.

The Ministry of Housing, Communities and Local Government said no final decision has been made regarding the future of section 106 agreements. A spokesperson stated that the government is reviewing ways to simplify the planning system while ensuring that the country can build the homes and infrastructure needed to meet growing demand.

Section 106 agreements have become a major source of affordable housing across England, particularly as council housebuilding has remained relatively low. Government figures show these agreements accounted for around 36% of all affordable homes delivered during the 2024–25 financial year.

Ministers argue that the current system can slow housing development by adding costs for builders already facing high interest rates and rising construction expenses. Housing associations have also reported financial challenges in purchasing affordable homes delivered through these agreements.

Similar measures have already been introduced in London, where affordable housing requirements for developers seeking fast-track planning approval were reduced following a sharp decline in new housing construction.

Under the proposed reforms, councils would receive payments from developers instead of affordable homes being built directly within medium-sized housing developments. Those funds would be reserved for delivering affordable housing in other locations.

While discussions continue within government, no formal announcement has been made. Officials are expected to make a final decision on the proposals in the coming weeks, while representatives of the expected incoming prime minister, Andy Burnham, have declined to comment on the matter.