A previously underutilised affordable housing scheme, Discounted Market Sale (DMS), has been identified as a potential solution to unlock stalled housing developments and broaden access to homeownership, according to new research from Savills.
The estate agency suggests that increased use of DMS homes could offer an alternative for developers struggling to find housing associations to purchase Section 106 properties. Housing associations traditionally buy much of the affordable housing provided through Section 106 agreements, but financial pressures have led some to reduce their purchasing activity.
Research by the Home Builders Federation (HBF) found 8,500 consented affordable homes lacked a housing association buyer as of October 2025. The HBF also identified more than 700 sites that had been delayed or stalled over the previous three years, attributing this to developers' difficulties in selling the affordable housing component. This issue can particularly affect SME housebuilders who often rely on project-specific finance and may need an affordable housing buyer before proceeding with a scheme.
DMS properties, including first homes, are sold at a minimum of 20% below their open-market value, with this discount maintained for subsequent buyers. Unlike some other affordable housing models, DMS does not require a housing association to purchase the property. Savills advocates for greater flexibility for developers to convert stalled Section 106 packages to DMS, which could help schemes advance without requiring additional public subsidy.
Savills estimates that 530,000 families currently renting privately could afford a new three-bedroom DMS property with a 30% discount and a 5% deposit. This figure represents 34% of private renting families with children. The report also suggests that removing existing income caps for affordable homeownership could enable an additional 55,000 families to afford a new three-bedroom DMS home.