The House of Commons Library has published ‘An explanation of how planning and housing policies might be used to ensure local people benefit from housing provision.’

It can be seen here, and comments:

Some local planning authorities (LPAs) require developers to only sell/rent new housing to people who have a local connection or who reside in the local area. This is called a “local connection test” or “principal residence test”.

Policies requiring a “local connection” or “principal residence” may be included in local plans, neighbourhood plans or supplementary planning documents where there is a local need.

Both local and neighbourhood plans form part of the “development plan” for an area. Applications for planning permission must be determined in line with the development plan, unless material considerations indicate otherwise.

LPAs have two ways to implement “local connection” or “principal residence” policies: planning conditions and planning obligations. Whether they can be used depends on local circumstances and whether there is robust evidence to support their use.

1. Planning conditions

LPAs can impose planning conditions when granting planning permission for new developments. These conditions must meet tests set out in the Government’s National Planning Policy Framework (NPPF): they must be necessary, relevant to planning and to the development to be permitted, enforceable, precise and reasonable in all other respects (paragraph 56).

1. Planning obligations (section 106 agreements)

Planning obligations, also known as section 106 agreements, are legally binding agreements made under section 106 of the Town and Country Planning Act 1990. They are made between a developer and the LPA. The Commons Library briefing on planning obligations provides more information.

Planning obligations must meet three tests set out in the Community Infrastructure Levy Regulations 2010. A planning obligation must be:

• necessary to make the development acceptable in planning terms;
• directly related to the development; and
• fairly and reasonably related in scale and kind to the development.

If a “local connection test” is imposed on a new development, the new housing can only be purchased by people who fulfil the test. Planning obligations are registered as local land charges; they are enforceable both against the person who entered the section 106 agreement initially and against any future owners of the land.