Policy priorities for the home building industry
The Home Builders Federation’s Autumn Budget representation to Government sets out the home building industry’s key policy priorities, including interventions to tackle market constraints, improve site viability and unblock long-standing bottlenecks within the planning process.
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As the Government doubles down on its ambition to deliver 1.5 million homes during this Parliament, the home building industry not only stands as a critical partner in achieving this goal, but also a vital driver of economic growth.
While recent planning reforms have been welcomed, almost all other factors determining housing supply are weaker today than in 2019-20.
Viability challenges, driven by rising taxes and a fragile housing market - especially for first-time buyers - are compounding the issue. In many regions, development is becoming less feasible, while in others, demand is too weak to sustain new projects. These pressures have led to a shrinking industry footprint, with fewer operational sites, and growing barriers to investment.
Without decisive action, the UK risks falling short of its housing and economic goals.
Tackling immediate barriers to increasing housing delivery
Our submission sets out the priority actions that should be taken at the forthcoming Budget to reverse the current trajectory and restore confidence within the sector, including:
Addressing viability constraints
Landfill tax
We are urging Government to reconsider the proposed abolition of the Reduced Rate of Landfill Tax, which will see costs increase by 3,000%.
Earlier this year, Government consulted on proposed changes to landfill tax that will see the current to rates of landfill tax replaced by single rate which would be set at the standard rate.
The cost for non-contaminated waste from new build sites is currently priced at £4 per tonne. If the proposals are introduced Landfill Tax will rise to £126 per tonne.
Our calculations show this would add an average of £15,000 to the cost of building every new home, subsequently rendering many small sites completely unviable and undermining Government’s ambitious housing targets.
Building Safety Levy
We are calling on Government to suspend the planned Building Safety Levy and instead seek contributions from product manufacturers and other responsible actors.
The Building Safety Levy is a tax on all new residential buildings – regardless of size or height – that will come into force in October 2026. It is intended to collect £3.4 billion from UK home builders and will be charged before completion of building work and occupation of buildings.
UK home builders have already contributed £6.4 billion towards building remediation, to cover properties they built and those delivered by other actors - including overseas developers.
With £2.6bn of the existing Building Safety Fund currently unallocated and Government still unable to identify exactly how many buildings need remediation work to be carried out, the necessity of the tax is in question.
In its inquiry into remediation, the Public Accounts Committee reinforced the unfairness of expecting one sector to fund more than £9.4bn worth of remediation costs without extracting any commitments from other sectors with responsibility for remediation, such as product manufacturers and overseas developers.
Therefore, Government should suspend the planned Building Safety and instead seek contributions from product manufacturers and other responsible actors to cover the remediation of properties built by non-UK-based builders.
Policy costs, taxes and levies
We’re calling for a moratorium on further new policy costs, taxes and levies on home building, along with a comprehensive analysis of the unprecedented increase in policy costs imposed from across various government departments in recent years.
Over recent years, the total cost of delivering new homes has risen sharply, driven by a combination of new regulatory requirements, taxes, and policy costs, as well as inflation in material and employment costs, including:
- Employers’ National Insurance increases
- Corporation Tax (2021 6% increase) and Residential Property Developer Tax (a 4% surcharge introduced in 2022)
- Nutrient neutrality
- Biodiversity Net Gain
- Future Homes Standard
- Landfill Tax rate changes – adding £15,000 per average home
- Electric vehicle charging - £500 to £1,500 per home
- Building Safety Levy – estimated to add £3,000 per average home (regardless of size or tenure)
We recognise that there is a legitimate policy rationale for many of these new or additional policy costs and taxes. However, in aggregate, they have imposed a significant cumulative burden on housing delivery, which is inevitably limiting the ability of developers to invest in new sites and threatening the housing pipeline.
Increasing market demand
Affordability
We are calling on Government to introduce a new homeownership scheme, part-funded by developers – Freedom to Buy.
The end of Help to Buy left the market without meaningful government support for home ownership for the first time in decades.
Combined with high interest rates, stretched affordability, and limited access to high loan-to-value mortgages for new builds, the sales environment has become increasingly fragile, particularly in London and other high-cost regions.
Without a confident base of prospective buyers, private sector investment will remain constrained.
Stamp Duty tax reform
We’re calling on Government to restore the pre-March 2025 first-time buyer Stamp Duty thresholds and undertake a review of the impact this duty is having on the housing market - and economy.
Earlier this year, changes to Stamp Duty thresholds significantly increased transaction costs, subsequently slowing down the housing market as many buyers - especially first-time purchasers - paused or postponed their plans
Restoring the pre-March 2025 first-time buyer thresholds could help unlock transactions and boost confidence.
Tackling Section 106 Affordable Housing challenges
We are urging Government to implement a solution to tackle the short-term challenges in the Section 106 Affordable Housing market.
Section 106 Affordable Housing has consistently accounted for around half of Affordable Housing (AH) delivery over the past decade and 15% of total new build completions. However, home builders are finding it increasingly difficult to fulfil their S106 AH obligations due to a lack of bids from Registered Providers (RPs).
Our research shows in the last three years alone, at least 700 housing developments are estimated to have been delayed as a result of this problem. Meanwhile, around 8,500 Affordable Homes under construction due to be built in the next 12 months are uncontracted, with an estimated 900 completed Affordable Homes currently standing empty.
Addressing planning constraints
Planning capacity
We are calling on Government to provide targeted funding to address skills gaps and lack of capacity within planning departments and support significant expansion of the Planning Delivery Skills Fund.
We strongly welcomed the decisive action taken by the Government to address longstanding challenges in the planning system, such as the reinstatement of local housing targets and introduction of the concept of grey belt land.
However, recent planning permission data suggest that the publication of the revised NPPF in December 2024 has not yet delivered the transformative impact anticipated, particularly for SME home builders.
One of the central causes is that Local Planning Authorities are significantly under‐resourced and understaffed - and have been so for a long period.
Although the industry welcomed the Government’s commitment to recruiting 300 additional planning officers, this addresses less than 15% of the estimated shortfall. HBF research estimates that 2,200 planners are needed to plug the gap.
Our annual survey of SME home builders found delays in securing planning permissions continue to be a major barrier to growth for 94% of respondents.
Planning delays
We are calling on Government to publish standard planning conditions, introduce a comprehensive national validation list and restrict local authorities from requesting additional information beyond what is necessary for robust decision-making.
Government must also ensure the forthcoming national planning policies embed a clear presumption in favour of development in most areas, with protection limited to sites of genuine environmental or heritage significance.
Clear expectations must be established for proactive pre-application engagement by local authorities, alongside reforms to how statutory consultees interact with the planning system to improve responsiveness and accountability.
Our recent research shows that the average time to take a small site from planning application submission to committee decision is 30 weeks. In fact, some small-site schemes took over three years to obtain permission.
Additionally, just 20% of major applications are currently decided within the statutory 13-week period.
Our proposed reforms are vital to speeding up decision-making, increasing the number of applications submitted, and unlocking the pipeline of new homes needed to meet national housing targets and drive economic growth.
Recent research shows that 89% of SME home builders cite under-resourced local authority planning departments as a key barrier to business growth - continuing a trend that has persisted since 2021–22.
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