Conservative shadow chancellor Andrew Griffith has said his party, if it was returned to power, would take £50,000 off the cost of building a new home in England and Wales by cutting back on regulations. The £50,000 figure claimed by Griffith reflects estimates by the housebuilding industry of the costs of new regulations and taxes. However, construction and housing experts warn that some of the savings could ultimately lead to higher government spending on schools, roads, and affordable housing.
And some analysts also warn the Conservative plans to scrap environmental regulations could potentially push up household energy bills in future. The Conservatives argue a number of regulations are adding to the cost of constructing and delivering new private homes. The Community Infrastructure Levy - a charge on certain new developments in England and Wales which councils can use to fund local infrastructure such as roads, schools and play areas The Future Homes Standard which requires new-build homes in England to meet higher energy-efficiency standards and use low-carbon heating such as heat pumps rather than gas boilers Section 106 which can require developers to provide a proportion of social or affordable housing in England as part of a new development.
The Tories say they will scrap or reform these and other regulations, saying: "All in all, we will cut the cost of delivering and therefore buying a new home by up to £50,000." BBC Verify has asked the Conservatives for a full breakdown of their figure. The Home Builders Federation (HBF) has estimated that new regulations, taxes and inflation - since 2020 - have increased the cost of building an individual new home in England and Wales by £76,000. It says this represents around 20% of the value of an average new home. £10,200 comes from the Future Homes Standard £12,700 in environmental protection measures such as "nutrient neutrality" and "biodiversity net gain" Excluding a £37,000 increase in the costs of material and labour, the HBF estimates that regulations and taxes have added around £42,000 to the cost of building a new home.
The Conservatives' estimate is slightly higher than the HBF's figure. The HBF also includes nearly £8,000 to reflect changes in building regulations. The Conservatives have not said they would find savings by scrapping all of those.
The party's plan also assumes the savings they have highlighted would be passed on to buyers rather than raising house builders' profits. Noble Francis of trade body the Construction Products Association (CPA) told BBC Verify that new costs imposed on builders through regulations and taxes in recent years - including the time firms spend navigating the regulatory system - are a serious constraint on residential construction rates. The Labour government is well off track in terms of meeting its target of building 1.5 million net additional dwellings in England over the course of this parliament - which requires an annual building rate of around 300,000 homes per year.
In the year to June only around 203,000 were built, according to official estimates. However, Francis also said: "It's easy for any party not in government to just claim they will get rid of red tape and cut costs but both the Conservatives and Labour have been in power in the last five years and have added extra costs to house building." The Future Homes Standard, for instance, was first proposed in 2019 when Conservative Prime Minister Boris Johnson was in power. Other analysts point out that the upfront construction cost savings from the plan could potentially lead to higher government spending in the future.
Extract — continue reading at the source.
