Section 106 Housing: What It Is & How to Buy

How Section 106 Housing Works

When a developer wants planning permission for a large residential project, the local council typically negotiates a Section 106 agreement. This legally binding contract requires the developer to deliver community benefits—often including a percentage of homes sold at discounted rates to people with a local connection or specific income thresholds.

Unlike shared ownership, you're buying outright (or with a mortgage), and there's no rent to pay on a retained share. The catch? Most Section 106 properties come with restrictive covenants: you may only be able to sell to another eligible buyer, and resale prices are usually capped or tied to local wage inflation rather than open-market growth. These restrictions can last decades, so it's essential to read the small print and speak to a solicitor who understands affordable housing clauses.

Who Qualifies for Section 106 Housing?

Eligibility varies by borough and development, but common criteria include a minimum residency period (often three to five years in the borough), household income caps (typically £60,000–£90,000 in London, according to borough affordable housing policies), and first-time buyer or key worker status. Some schemes prioritise NHS staff, teachers, or council employees.

You'll usually need to register with your local council's housing team or a nomination agent like Homebuy Agent to be considered. Boroughs such as Greenwich—where we see strong Section 106 delivery—maintain their own waiting lists and publish new schemes on their websites. It's worth checking your borough's planning portal regularly, as opportunities can close quickly once advertised.

Where to Find Section 106 Homes

Section 106 properties are rarely listed on Rightmove or Zoopla. Instead, they're advertised through council portals, housing association websites, or specialist platforms. In Greenwich, for example, the Royal Borough publishes details of upcoming affordable sales as part of major regenerations along the Thames and around Woolwich.

If you're serious about finding section 106 housing, bookmark your borough's affordable housing page and sign up for alerts. Our /estate-agents/greenwich page includes links to local resources, and our team can point you toward current schemes when you're exploring your options. You can also check our /sold-prices tool to understand how recent Section 106 sales compare to open-market equivalents in your target postcodes.

The Buying Process and What to Watch For

Once you've been nominated for a property, the sales process mirrors a standard purchase: you'll instruct a solicitor, arrange a mortgage (lenders are familiar with Section 106, though some may apply stricter criteria), and exchange contracts. The developer or housing association will provide a sales pack detailing the restrictive covenants, which your solicitor must review carefully.

Be prepared for restrictions on subletting—most Section 106 agreements prohibit Buy to Let—and remember that future buyers must also meet eligibility tests, which can narrow your pool when you come to sell. That said, for many buyers the upfront saving and chance to live in a desirable area outweigh the long-term limitations. Always budget for the same surveys and checks you'd commission on any new-build, and don't skip the snagging inspection.

Is Section 106 Right for You?

Section 106 housing works brilliantly if you plan to stay put for several years, need an affordable entry point in an expensive borough, and meet the eligibility tests. It's less suitable if you want maximum flexibility to sell or let, or if you're banking on rapid capital growth to fund your next move.

We've seen clients in Greenwich and neighbouring boroughs secure fantastic homes—modern flats near the /property-for-sale/greenwich hotspots, close to the DLR and river—at prices that simply wouldn't be accessible otherwise. Just go in with your eyes open: read every clause, plan for the long term, and make sure the location and property genuinely suit your needs rather than rushing because the discount looks attractive.

If you'd like a frank conversation about whether section 106 housing makes sense for your circumstances—or a free valuation if you're weighing up a sale to fund your next purchase—book a phone appointment with Seymont London at /valuation and we'll talk you through your options.