Viability has taken a serious blow, according to the Home Builders Federation’s latest report
Due to recent policies and updated charges, housebuilding costs have risen by £76,000 per home in the last six years.
Policy, taxes, and regulations are all putting increasing pressure on housebuilders, and threaten to deter companies from starting new projects.
There has been a downturn in housing delivery
In 2024/25, only 208,000 new homes were completed, a full 16% down from the peak in 2020, and low viability has been a huge cause for this drop.
The HBF’s estimated £76,000 in extra costs per home is made up of the following:
- 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
- Over £23,000 in regulatory costs, including £7,770 for building regulations, £5,700 for Biodiversity Net Gain (BNG) and £10,200 in costs linked to the Future Homes Standard
- £37,000 in increased material and labour costs due to high levels of inflation
- £7,000 in additional potential site-specific costs like nutrient mitigation requirements
The HBF is therefore calling for the government to impose a moratorium on the costs of new policies, taxes, and levies for homebuilding, and to conduct a comprehensive review of their cumulative impacts.
The HBF also call for the Building Safety Levy to be cancelled, as the contributions made to building safety should be more than adequate when combined with the funds waiting in the Building Safety Fund.
“Planning reform alone is not enough”
Neil Jefferson, chief executive at the Home Builders Federation, said: “The Government’s ambition for new homes relies heavily on private home builders to deliver, yet it is not providing the conditions for these businesses to operate.
“While the industry supports the ambition behind some of these policies, there has been little consideration of their combined impact. The fact that house completions have remained slow clearly shows that planning reform alone is not enough and that other pressures are at play.
“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.
“If Government wants the private sector to deliver, it must create the right conditions for it to do so. Without urgent action to review and reduce the overall cost burden, the delivery of both private and affordable homes will remain at risk, and people will continue to miss out on the homes they need.
“Increased taxes and policy costs, alongside suppressed demand due to a lack of affordable mortgage lending and no Government support for buyers, are preventing builders increasing housing supply and putting the Government’s housing ambitions increasingly out of reach.”
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