Modifying Planning Obligations: What Is the Government Really Acknowledging?

The government’s letter of 15/01/26 to the Planning Inspectorate on modifying planning obligations is positioned as a pragmatic response to a housing market under strain. It recognises what much of the property sector has been experiencing for some time: viability has weakened, delivery has slowed, and the existing planning framework is struggling to translate permissions into completed homes. (Read the letter here)

Yet, beyond its stated intent, the letter raises a more fundamental question. Does this shift towards flexibility signal that the government is beginning to acknowledge how far current housing policy has drifted from market reality?

Are the UK’s Housing Targets Still Realistic?

The government remains publicly committed to delivering a historic increase in housing supply, including social and affordable homes. However, the need to revisit existing planning obligations suggests that many schemes were approved on assumptions that no longer hold in the current economic climate.

High interest rates, elevated construction costs, and a more constrained financing environment have materially altered development economics. If housing delivery now depends on renegotiating obligations agreed under very different conditions, it raises doubts about whether national housing targets were ever robust enough to withstand economic change.

Rather than addressing this gap directly, policy appears to be adjusting around it.

Section 106 Affordable Housing: The Pressure Point in Viability

One of the most significant implications of the letter is its treatment of Section 106 affordable housing obligations. While reductions are framed as exceptional and subject to scrutiny, the reality is that affordable housing is often the most flexible variable in a scheme’s financial model.

If affordable provision is increasingly sacrificed to make developments viable, the question is not whether homes get built, but which homes get built. Section 106 has long been a cornerstone of affordable housing delivery in England. Weakening its role - even slightly - risks reducing the supply of genuinely affordable homes over time.

The letter acknowledges this risk, but does not resolve it.

Pragmatism Versus Policy Consistency in Planning Decisions

The government urges local planning authorities to adopt a pragmatic approach when considering requests to modify planning obligations. At the same time, it reinforces that new mechanisms such as Section 73B (which allows a local planning authority to grant permission for minor changes to a planning permission, including changes to the description of development, this being something that Section 73 cannot because it related to varying or removing conditions or obligations attached to an existing planning permission).

This dual message, on the one hand - vary conditions, and, on the other hand permit minor material changes to the application substance, creates uncertainty. Developers are encouraged to bring schemes forward, yet warned that fundamental changes to viability will face close scrutiny. The result is a planning environment that gestures toward flexibility while maintaining expectations that are increasingly difficult to meet.

For a sector already navigating regulatory complexity, this ambiguity adds further friction.

Can Flexibility Unlock Delivery in Today’s Market Conditions?

There is broad support across the industry for any initiative that helps get stalled developments moving. With interest rates remaining elevated, construction labour in short supply, and limited downward movement in build costs, flexibility is often the difference between delay and delivery.

However, flexibility alone does not address the structural challenges facing housing development. Adjusting planning obligations may improve short-term viability for some schemes, but it does not change the underlying cost base or financing environment.

Without addressing these fundamentals, the impact of such measures is likely to be limited.

Housing Delivery Policy: Managing Symptoms or Confronting Reality?

Ultimately, the letter raises a final, more strategic question. Is planning policy now responding to the causes of underdelivery, or simply managing its symptoms?

By allowing affordable housing obligations to absorb pressure while broader economic constraints remain unresolved, there is a risk that policy shifts redistribute strain rather than increase supply. Targets remain ambitious, delivery remains constrained, and the gap between the two is bridged through compromise rather than alignment.

The concern is not the call for pragmatism itself, but what it may be substituting for: a more candid reassessment of what can realistically be delivered, and at what cost.

In summary:

As the UK Government pushes ahead with planning reform to “get Britain building”, the introduction of new tools such as Section 73B marks a clear shift towards flexibility and delivery. The aim is simple: remove friction, speed up development, and unlock sites that might otherwise stall. That spirit was neatly captured by Rachel Reeves, who coined the now-familiar refrain “build, baby, build” — a signal of intent that housing delivery, investment and growth are firmly back at the top of the agenda.

Against this evolving policy backdrop, The Ringley Group continues to support new and established entrants across the UK living sectors, with particular strength in Build to Rent, co-living, multi-family, single-family rental, and later living. From early feasibility through planning, delivery and long-term operation, Ringley works alongside developers, investors and landowners to help translate policy opportunities into viable, deliverable schemes.

At Ringley, our consultancy teams bring together planning strategy, asset management, operational insight and resident-focused design, ensuring schemes are not only consentable, but commercially and operationally successful. With a strong track record of navigating complex planning environments, securing permissions, and optimising layouts and tenure mixes, Ringley has played a role in many of the sector’s most successful and forward-thinking projects, bringing forward some 15,000 homes to date.

As planning reform continues to evolve - and mechanisms like Section 73B begin to bed in - experience, judgment and sector specialism will matter more than ever. For those looking to build, adapt and grow in the UK’s living sectors, Ringley remains a trusted partner in turning ambition into homes.