Nomination agreement with a registered provider
A nomination agreement decides who moves into affordable rented homes. It is a housing document, not a planning one, and it often sits on the critical path.
A nomination agreement is the document that decides who actually moves into the affordable rented homes on your scheme. It is made between the local housing authority and the registered provider that owns the homes, and it gives the authority the right to put forward households from its own waiting list for a defined share of lettings. It is not a planning document, and the section 106 agreement does not replace it.
That distinction causes real delay on small schemes. The planning obligation secures that affordable homes will be provided and occupied by eligible households. The nomination agreement is how the housing authority turns that into named tenants, and a registered provider cannot let the homes without it.
What a nomination agreement does
Three things.
It defines the proportion of lettings over which the authority has nomination rights, usually all of the first lettings on a new scheme and a smaller proportion of subsequent re-lets, with the figures set in the agreement rather than by statute.
It sets the process: how a vacancy is notified, how long the authority has to nominate, how many candidates it offers, and what happens if none is suitable or none is nominated in time.
And it records the eligibility criteria the authority will apply, drawn from its allocation scheme under the housing legislation, including any local connection or local lettings arrangements for the particular site.
Nominations apply to rented homes. Shared ownership and other intermediate products are allocated differently, through eligibility and priority criteria rather than a nomination list, which is why a scheme delivering only shared ownership may need no nomination agreement at all.
Who the parties are
Two parties sign: the local housing authority and the registered provider. The developer is usually not a party, which is the source of much of the frustration, because the developer is the one with a programme.
In a two-tier area, confirm which body is the housing authority. The district or borough council is normally both the local planning authority and the housing authority, while the county council is neither for these purposes. In a unitary authority it is the same organisation, though the housing and planning teams may be some distance apart in practice.
Where the registered provider has not yet been selected, there is no second party and the agreement cannot be drafted. That is the single most common reason nomination agreements are late, and it is within the developer's control. Record provider engagement in the Affordable Housing Statement at application stage so the authority can see the position early.
Percentage of first and subsequent lettings
The split between first lettings and re-lets exists because the authority's interest changes over time. On first occupation the homes are new supply, and the authority wants to place households from its register. On later re-lets the provider has its own tenants, transfer applicants and management considerations.
What to check in the drafting:
- whether first lettings means the first tenancy of each home, or all lettings in an initial period
- the proportion applying to re-lets, and whether it is calculated across the scheme or home by home
- how the count is kept, and who reports it
- the time the authority has to nominate before the provider may let independently
- what happens to homes the authority declines to nominate for
- whether any homes are excluded, for example adapted homes let through a separate route
That nomination period matters commercially. A provider holding an empty home while waiting for nominations carries a void cost, so providers negotiate for a short period and a clear right to let on if nothing comes forward.
How it sits alongside the section 106
The planning obligation is the planning instrument. It defines affordable housing, fixes the tenure split and the plot numbers, restricts occupation to eligible households, and usually requires a transfer to a registered provider approved by the authority.
Some obligations go further and require a nomination agreement to be in place before occupation, or require the authority's approval of its terms. Read the obligation before assuming the nomination agreement is somebody else's problem, because that clause makes it a condition of your ability to sell or let.
Where the scheme changes after permission, the obligation may need varying by deed, and the unit schedule may need a planning application to go with it, which our note on varying planning conditions under section 73 covers.
The two documents should not contradict each other. If the obligation says the homes are for households in housing need with a local connection, and the draft nomination agreement imports a different definition, somebody will have to resolve it at the worst possible moment.
Timing against practical completion
Work backwards from first occupation.
- Select and appoint the registered provider, with heads of terms for the transfer.
- Give the housing authority the scheme details: plot numbers, tenure, sizes, person capacities and expected completion dates.
- Circulate the draft nomination agreement, usually on the authority's standard form.
- Allow for the authority's legal review and any member or delegated sign-off.
- Complete the agreement before practical completion of the first affordable home.
- Notify vacancies and run the first nominations cycle, which itself takes weeks.
Six to eight weeks for a straightforward agreement on a standard form is realistic, and considerably longer where anything is negotiated. On a small scheme the agreement often has to be completed before any affordable home can be occupied, so it sits directly on the critical path to a sales completion.
An illustrative structure on a small scheme
Take an illustrative example. A scheme of twelve homes, of which four are affordable: two homes for affordable rent and two for shared ownership, transferred to a registered provider on a golden brick basis.
The nomination agreement covers only the two rented homes. It gives the authority nomination rights over the first letting of each, and over a stated proportion of re-lets thereafter, with a short notification period and a clear right for the provider to let on if no suitable nomination is made. The two shared ownership homes are allocated by the provider against eligibility and local priority criteria set out in the section 106 agreement rather than through nominations.
The practical lesson from that structure: two homes generate as much documentation as twenty, and the authority's housing team has no more capacity for a small scheme than a large one. Start earlier than the size suggests.
What delays agreement most often
In rough order of frequency.
No registered provider appointed, so there is no counterparty. A provider who declines the scheme late, often because of service charges, unit sizes or a cluster too small to manage. Disagreement over local connection criteria, where the authority wants a tighter definition than the provider's own policies allow. Mortgagee protection clauses, which lenders require and which take time to agree with an authority's legal team. And simple capacity, where the housing team is handling several schemes at once.
Two things shorten it. Ask the authority for its standard nomination agreement at application stage and give it to prospective providers with the tender pack, so objections surface before appointment. And ask, in writing, who in the housing team will handle it and what their current lead time is.
One honest point: delivery pressure can make an authority quicker on this than you expect, or slower, and the Housing Delivery Test position is a poor predictor of either. Treat the lead time as something to find out rather than assume.
Draft your Planning Statement and affordable housing documents with PlanScope, then send them for professional review. PlanScope provides AI-assisted draft reports for planning applications. Reports should be reviewed before submission. We do not guarantee planning approval. This is general guidance, not legal advice; check the position with your local planning authority or a qualified professional before relying on it.
Frequently asked questions
Is a nomination agreement part of the section 106?
No. The planning obligation secures that affordable homes are provided and occupied by eligible households. The nomination agreement is a separate contract between the local housing authority and the registered provider that governs who is offered tenancies. Some obligations require a nomination agreement to be in place before occupation, so read the deed.
Who are the parties to a nomination agreement?
The local housing authority and the registered provider that will own the homes. The developer is usually not a party, which is why appointing the provider early matters: without a provider there is no counterparty and the agreement cannot be drafted. In two-tier areas, confirm which council is the housing authority.
Do shared ownership homes need nominations?
Generally not. Nomination rights apply to rented homes. Shared ownership and other intermediate products are allocated by the provider against eligibility and priority criteria, often set out in the section 106 agreement itself. A scheme delivering only shared ownership may need no nomination agreement at all.
How long does a nomination agreement take to complete?
Six to eight weeks is realistic on an authority's standard form with nothing contested, and longer where local connection criteria or mortgagee protection clauses are negotiated. Add time for the first nominations cycle after completion. On a small scheme this can sit directly on the critical path to a sales completion.
What is the most common cause of delay?
No registered provider appointed, so there is nobody for the authority to contract with. Beyond that: a provider declining the scheme late over service charges or unit sizes, disagreement on local connection criteria, mortgagee protection clauses, and simple capacity in the housing team. Ask for the standard form at application stage.
Sources and further reading
This article is general guidance about the planning system in England and, where stated, the rest of the UK. It is not legal or professional advice. Check your local planning authority’s validation requirements and take professional advice for your specific site.