 Section
106 Planning Restrictions
A Local Authority will often use a Section
106 planning restriction when they want to
control how a property can be used. These
powers come from Section 106 of the Town and
Country Planning Act 1990.
So why is this relevant to a holiday let
property?
Local Authorities will impose
a 106 to restrict how a property can be used
and/or occupied. For a holiday let this can mean
having no residential usage to maintain tourism
from holiday lettings rather than second home
ownership. It will include clauses to prevent
long-term holidaymakers so occupancy may be
restricted to no more than 28 consecutive days
or no more than 6 months in 12 months.
Having this type of Section
106 Agreement in place has 2 possible
consequences:
-
You will not be able to
'retire' to this property and live in it
permanently
-
Not all
mortgage lenders will be happy to take
on a property with a 106 clause
Fortunately, we do have a
panel of lenders that will accept section 106
agreements for holiday let properties (depending
on the extent of the restriction).
We have found that many
prospective purchasers of holiday let properties
are not aware of these possible problems. Agents
differ with some being more forthcoming than
others. When viewing properties it is therefore
important to bring up this subject at an early
stage so you may consider your options.
Properties such as
holiday lodges
and those located within Parks or Complexes will
nearly always have a Section 106 planning
agreement restriction.
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