The Federation of Master Builders (FMB) is asking the chancellor to remove the proposed removal of the landfill tax exemption for materials disposed of in quarries
The removal of the landfill tax exemption could add up to £28,000 in costs for building new homes on small sites.
This would be especially devastating for SME builders, say the FMB, who are already restricted by rising costs.
The full statement can be read below:
Brian Berry, chief executive of the FMB, said: “At a time when the Government is failing to meet its 1.5 million housing target the idea of an additional tax adding up to £28,000 for each new home on small sites is a nonsense. The Chancellor needs to act decisively and abandon the proposed landfill tax quarry exemption in her Autumn Budget on 26th November. This measure will help all housebuilders but particularly the smaller local ones who are being squeezed out of the housing market. Just 9% of all new homes are built by SME housebuilders as they are being held back by rising costs and delays in the planning system.
“With inflationary pressures still biting and SME housebuilders facing rising costs and subdued demand the Chancellor need to focus on getting the housing market moving. Greater investment is needed to support underfunded local authority planning departments as well as measures to incentivise building companies to hire the next generation of tradespeople. Funding for apprentice support services and financial incentives for small firms to take on trainees would help secure the building workforce that is needed to build the homes for the future.”
SMEs facing a myriad of challenges
In October, the Home Builders Federation released a report detailing that Small- and Medium Enterprise (SME) housebuilders are facing too many challenges, and they are only growing.
Traditionally, SME housebuilders have been responsible for around 35,000 homes per year, but in 2024, they built just 17,000. Planning permissions granted on sites of 150 units or fewer has dropped from 20% in 2008 to 6-8% now.
The HBF report also found:
- 98% of SMEs report implementation challenges with Biodiversity Net Gain, whilst 94% report application delays as a result of BNG
- From autumn 2026, the Building Safety Levy is expected to add thousands of pounds of additional cost to build per home, regardless of height
- The recent HM Treasury Landfill Tax consultation would see rates for most of the waste from home building sites rising by 3000%, potentially adding around £15,000 per home and, in some cases, over £50,000 as a de facto new levy on new homes
- A lack of interest in Section 106 Affordable Housing from Registered Providers is delaying the delivery of around 8,500 units
- Nutrient neutrality acts as a major blocker, with SMEs unable to manoeuvre around this using expensive strategic mitigation schemes or land for offsetting
- The Planning and Infrastructure Bill will allow LPAs to fully recover application costs through higher fees, which MHCLG admits could disproportionately impact SME developers by significantly increasing the cost of minor applications
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