Selling a House With a Section 106 Agreement (2026 Guide)

By Lisa Hayes · 8 August 2026

Yes, you can sell a house with a Section 106 agreement, but you can't sell it like an ordinary home. A Section 106 (often written "S106") is a planning obligation baked into your property's title, and it can control who you're allowed to sell to, the price you can accept, and even who's permitted to live there. Get to grips with the exact wording early and the sale is manageable. Ignore it, and you'll watch buyers and their mortgage lenders melt away three weeks before completion.

I've spoken to plenty of homeowners who only discovered their S106 when a buyer's solicitor flagged it in the local authority search, months into a sale that was already limping. That's the worst way to find out. So let's do this properly, from the top.

What is a Section 106 agreement, in plain English?

When a developer wants planning permission for a new site, the local planning authority (your council's planning department) can attach conditions to soften the impact on the community. Some of those conditions are wrapped up in a legal agreement made under Section 106 of the Town and Country Planning Act 1990. Hence the name.

Think of it as a private contract between the landowner and the council that becomes part of the land itself. It's registered as a local land charge, which is why it shows up in the LLC1 and CON29 searches every competent buyer's solicitor orders. The legal phrase you'll hear is that it "runs with the land" — meaning it doesn't expire when the developer moves on. It sticks to the bricks. You inherited it when you bought, and your buyer inherits it from you.

Here's the part most homeowners get wrong. They assume "Section 106" means one specific restriction. It doesn't. It's a container. The council can put almost anything inside it. That's exactly why the single most useful thing you can do today is dig out the deed and read the clauses that apply to your home, rather than trusting a forum post about someone else's.

Which Section 106 clauses actually affect your sale?

Most of what sits in a big development's S106 is developer business: money for local schools, highway improvements, open space, affordable housing quotas across the whole site. As an individual owner selling one house, those don't land on you. The clauses that matter to you personally are the ones attached to your specific plot. There are really only a handful worth losing sleep over.

Notice the pattern. The clauses that hurt are the ones that either fix your price or fence off your buyers. If your S106 does neither — say it's just a contribution the developer paid off years ago — you may be worrying about nothing. Your conveyancer can tell you which camp you're in within an afternoon of reading the deed.

The discount market sale clause: the one that caps your price

This is the big one for affordable-housing plots. A discount market sale (DMS) clause says you can only sell for a set percentage below the property's open market value. If the clause says 30% and a surveyor values your home at £300,000 on the open market, you're selling at £210,000. That's not a negotiating position. It's a ceiling written into your title.

Selling under a DMS clause has its own choreography, and skipping a step is how sales collapse:

1. Get the open market valuation done properly. The council will almost always insist on an independent RICS "Red Book" valuation rather than an estate agent's optimistic guess. The discount is applied to that figure.
2. Tell the local authority you intend to sell. Many DMS agreements require you to notify the council and get the sale price signed off before you market. Do this first, not last.
3. Market to eligible buyers for the required period. The agreement usually names a marketing window — often eight to twelve weeks, sometimes expressed as a fixed number of days — during which only qualifying buyers can purchase.
4. Use the cascade if nobody eligible comes forward. Most modern DMS clauses include a "cascade": if no qualifying buyer appears within the marketing period, you can sell to a wider pool — but crucially, usually still at the discounted price, not the full market value.

The mistake I see again and again is owners agreeing a price with a buyer, then discovering the council never approved it and the whole thing has to restart. Treat the council as a party to your sale from day one, because legally, that's what it is.

Local occupancy clauses: why your buyer pool suddenly shrinks

Rural areas love these, and I understand why — they exist to stop local homes being hoovered up as holiday cottages and second homes, pricing young families out of their own villages. Noble aim. Genuine headache when you're the one selling.

A local occupancy or local connection clause typically requires your buyer to prove a link to the area: they live there, they work there, they were born there, or they have close family nearby. Some are tied to a specific parish. Others cover a whole district. The wording varies wildly, so again — read yours.

The practical effect is simple. You've just deleted most of the national buyer market and kept only people with a local tie who also want your specific house at your specific price. That takes longer. It's why homes with tight occupancy clauses can sit unsold for months while the identical house next door with no restriction sells in a fortnight. If you're stuck in that position, it's worth reading our guide on how to sell a house that feels unsellable, because many of the same tactics apply.

Will a mortgage lender touch a Section 106 property?

Here's where sales live or die, so pay attention to this bit even if you skim the rest.

A lender's nightmare with a restricted property is repossession. If they have to seize the home and sell it, a discount or occupancy clause could trap them into selling cheap, or to a tiny pool of buyers, and they might not recover the loan. So lenders demand a specific safety valve: a mortgagee protection clause (sometimes called a mortgagee exclusion clause). It lets the lender sell the property on the open market, free of the restriction, if they repossess and can't offload it to another eligible buyer or a registered provider within a set timescale.

The blunt reality:

If you don't know whether your agreement has a mortgagee protection clause, that's the very first question for your solicitor. It changes your entire strategy. A well-protected S106 is a mild inconvenience. An unprotected one turns your home into a cash-buyers-only asset, which is a different sale with a different price expectation. Our rundown of how cash house buyers work is worth a read if you land in that second camp.

Can you get rid of a Section 106 agreement?

Sometimes. Not quickly, and not by wishing.

Under Section 106A of the Town and Country Planning Act 1990, anyone bound by a planning obligation can apply to the local planning authority to have it modified or discharged. For obligations entered into after 6 April 2010, you can apply once five years have passed from the date the obligation was made. The council can also agree to vary or discharge it by deed at any time if both sides are willing — you don't always have to wait five years if the authority is cooperative.

If the council refuses or sits on your application, Section 106B gives you a right of appeal to the Secretary of State, handled through the Planning Inspectorate. That's a real route, but it's a planning process, not a form you post off. It takes months, it can cost you in professional fees, and the council will defend a clause that's doing exactly what it was designed to do.

My honest advice: don't build your sale timetable around discharging an S106. If it happens, treat it as a bonus. Applying to modify a genuinely onerous clause — say, badly drafted wording that no lender will accept — can be worth it. Trying to strip out a discount clause purely so you can pocket the full market value is usually a long, expensive road to a no.

First Homes: the discount that never leaves

The First Homes scheme deserves its own mention because a lot of newer buyers don't realise what they've signed up to until they sell. First Homes are new-build properties sold to first-time buyers at a discount of at least 30% off market value, with local authorities free to set the discount higher on a site-by-site basis.

The catch is permanence. That discount is locked to the property through a Section 106 agreement and registered as a restriction on the title at HM Land Registry. When you sell, you must pass the same percentage discount to your buyer, who must themselves meet First Homes eligibility and be approved by the council. If your home came with a 40% discount, it sells at 40% below market value to buyer after buyer, forever. You can't buy your way out of it, and you can't sell it as an ordinary home later. Go in with your eyes open, and price your onward move accordingly.

How long does it take to sell a Section 106 property?

Longer than a standard sale, and the honest answer is "it depends on which clauses you've got." A property with only a spent developer contribution can sell as fast as any other. A home with a tight local occupancy clause and no mortgagee protection can take many months, because you're waiting for a rare buyer who is eligible, cash-ready, and willing.

Three things stretch the timeline more than anything else: the council sign-off on price, the required marketing period to eligible buyers, and mortgage friction on the buyer's side. You can't compress the marketing window — it's contractual — but you can front-load the paperwork so nothing waits on you. If speed genuinely matters, it's worth understanding realistic timescales for a standard sale first, which we cover in our guide to how to sell a house fast, and then adding the S106 overhead on top.

What are your real options for selling?

Broadly, you've got three routes, and the right one depends almost entirely on your clauses.

1. Open market, the ordinary way. If your S106 has a mortgageable structure and no crippling occupancy restriction, sell through an estate agent like any other home. Just build in the council notification and any required marketing period, and price to the restriction, not to the street.

2. Specialist and eligible-buyer routes. For discount market sale and First Homes properties, the council or a housing association may keep a register of qualifying buyers. Ask. It can be faster than open marketing because the demand is pre-qualified. Some housing associations will even buy back the unit in certain schemes.

3. Cash buyer or genuine investor. When a clause makes the property effectively unmortgageable, or you simply can't wait out a long marketing period, a cash buyer sidesteps the mortgage problem entirely. You'll accept less — a cash buyer prices in the restriction and the hassle — but you swap an uncertain, drawn-out sale for a defined one. If you go this way, deal only with a buyer who understands S106 properties and won't drop the price at the eleventh hour. Our guide to the best house buying companies explains how to tell a real buyer from a time-waster, and you can compare genuine offers when you find a buyer through us.

Whichever route you take, the anchor is a proper valuation. Because your ceiling is a percentage of open market value, knowing that market figure accurately is the difference between a fair price and a giveaway. Start with an honest sense of how much your house is worth on the open market, then apply the discount — never the other way round. A quick free house valuation is a sensible first move.

How do you find out if your home has a Section 106?

If you're not certain whether your property carries one, don't wait for a buyer's solicitor to break the news. You can find out yourself in a couple of ways. Your own conveyancing file from when you bought will usually contain the agreement or reference it. Failing that, order your title register and title plan from HM Land Registry for a few pounds — a planning obligation is often noted there as a restriction or in the charges register. And your local council's planning portal will hold the original permission and any linked S106 for the site, searchable by address or application number.

Do this before you list, not after. It costs almost nothing, and it turns a nasty mid-sale surprise into a fact you control the conversation around.

A worked example

Picture a two-bed new-build sold under a discount market sale clause at 30% below market value, with a mortgagee protection clause and a local-connection requirement. A RICS surveyor values it on the open market at £250,000 today. Your ceiling is £175,000 — the 30% discount holds whether the wider market rises or falls, because it's a percentage, not a fixed figure. You notify the council, market for the required period to buyers with a local connection, and because the mortgagee protection clause is clean, an eligible buyer secures a mortgage. It completes, slower than an unrestricted sale but without drama.

Now change one thing. Strip out the mortgagee protection clause. Suddenly no mainstream lender will touch it, your buyer pool drops to local people with £175,000 in cash, and the sale that would have taken three months could take a year — or push you toward a cash buyer at a further discount for the certainty. Same house, same headline restriction, wildly different sale. That single clause is why "read your deed" is the advice I repeat more than any other.

Common mistakes that sink Section 106 sales

After enough of these, you see the same avoidable errors on repeat:

• Not reading the deed. Owners rely on hearsay about "Section 106 properties" instead of their own clauses. Your agreement is the only document that matters.
• Marketing before telling the council. Agreeing a price the authority then rejects means starting again. Get sign-off first.
• Pricing to the street. Listing at what the unrestricted house next door fetched, then wondering why offers evaporate. Price to the restriction.
• Assuming any buyer's mortgage will be fine. Without a mortgagee protection clause, plenty won't. Check before you accept an offer that depends on lending.
• Hiding the restriction. It will surface in the buyer's search regardless. Disclose it up front — a buyer who finds out late walks, and rightly distrusts you.
• Banking on a discharge. Treating a Section 106A application as a done deal and timing a purchase around it. It's slow and uncertain.

The thread running through all of these is the same: certainty beats optimism. A Section 106 sale rewards the owner who reads the paperwork, involves the council early, prices honestly, and picks the route that matches their actual clauses rather than the sale they wish they had.

A quick word on getting advice

Section 106 agreements sit at the join between property law and planning law, and the wording is genuinely technical. A conveyancer who has handled restricted-title sales before is worth their fee many times over here — far more than the cheapest quote you can find online. If your clause looks onerous or unusual, a planning solicitor can tell you whether a modification is realistic before you spend money chasing one. This guide gives you the lay of the land, but it isn't legal advice, and your deed is the document that decides everything.

None of this means a Section 106 property is a trap. Thousands sell every year. It just means you're playing a slightly different game with an extra player at the table — the council — and the owners who accept that early are the ones who complete without drama.

If you'd like to see what your home could achieve and weigh a straightforward sale against the open-market route, you can compare offers and start your valuation here. No pressure, no obligation — just a clear read on your options so you can choose the route that fits your restriction and your timeline.