The Home Builders Federation (HBF), which lobbies for home builders in England and Wales, has called on the government to scrap the Building Safety Levy due to come into force in October.
It also wants a moratorium on new taxes and regulations, claiming that new rules designed to reduce the sector’s environmental harm, lower energy bills and protect people in buildings – including biodiversity net gain, the Future Homes Standard and landfill tax – have helped add £76,000 to the cost of building a home since 2020.
The HBF claims the cumulative burden of policy, taxation and regulations now makes housebuilding so costly that it no longer makes economic sense.
It said the so-called “viability crunch” is evident in the sharp downturn in housing delivery, with just 208,000 new homes completed in 2024/25, down 16% from the 2020 peak.
How they calculated the £76k
Within the HBF’s calculated extra cost per home is more than £7,000 in taxes and levies, including £2,000 in landfill tax, £2,320 from the forthcoming Building Safety Levy, £2,055 in other taxes and £985 from inflationary increases on existing charges such as Section 106 agreements.
Then comes more than £23,000 in regulatory costs, including £7,770 for building regulations, £5,700 for BNG and £10,200 in costs linked to the Future Homes Standard.
Some £7,000 goes to what it calls “additional potential site-specific costs like nutrient mitigation requirements”.
The biggest line item – £37,000 – came not from taxes or regulation, but increased material and labour costs driven by geopolitical disruptions including covid, Brexit and Russia’s invasion of Ukraine.
Here, materials have gone up by 40%, or £28,500 per home, while labour rose 23%, or £8,500 per home.
HBF notes the conflict in Iran could make the situation worse.
‘Planning reform is not enough’
“While the industry supports the ambition behind some of these policies, there has been little consideration of their combined impact,” said HBF chief executive Neil Jefferson.
“The fact that house completions have remained slow clearly shows that planning reform alone is not enough and that other pressures are at play.”
He added: “Reforming the planning system and reintroducing housing targets for local authorities was a vital first step in boosting supply, but doing so while layering on more taxes, levies and policy costs is akin to having one foot on the accelerator and the other on the brake.”
Levies and taxes
HBF noted the Building Safety Levy – introduced after Grenfell to help fund the remediation of unsafe residential buildings – will apply to all new homes with the aim of raising £3.4bn.
But it said big developers had already been hit by the 4% residential property developer tax surcharge, introduced in 2022 to mitigate the cladding crisis.
It added that most builders subject to the new levy will be SMEs that don’t normally build the multistorey blocks where unsafe cladding has been an issue.
HBF also noted that landfill tax doubled in April this year and is set to rise by around 500% by the end of the Parliament. It wants the government to suspend further planned rises.
It said that while the industry supports BNG, it has proved more expensive than expected due to limited guidance, varying local requirements and, when it is impossible to meet the requirements on a site, a shortage of suitably sized offsite ‘credits’.
