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Conservative shadow chancellor Andrew Griffith has announced that if the party were to return to power, they would reduce the cost of building a new home in England and Wales by £50,000 by cutting back on certain regulations. This figure is based on assessments from the housebuilding industry regarding the expenses linked to new rules and taxes imposed on construction projects. However, experts in housing and construction caution that these proposed savings might lead to increased government expenditure on essential infrastructure like schools, roads, and affordable housing. Additionally, some analysts warn that removing environmental regulations could result in higher energy bills for households over time.
The Conservative Party identifies several regulations they believe inflate construction costs. These include the Community Infrastructure Levy, which councils use to fund local infrastructure such as roads and schools; the Future Homes Standard that mandates higher energy-efficiency requirements and the use of low-carbon heating systems in newly built homes; and Section 106 agreements that obligate developers to include a share of affordable or social housing in their projects. The party claims that scrapping or reforming these rules would collectively cut the cost of delivering new homes by up to £50,000. BBC Verify has requested a detailed breakdown of this estimate, which the Conservatives have not yet fully disclosed.
The construction industry’s perspective is reflected in findings from the Home Builders Federation (HBF), which estimates that since 2020, new regulations, taxes, and inflation have added approximately £76,000 to the cost of building a typical new home in England and Wales. This increase represents around 20% of the average home’s value. Of this sum, the HBF attributes about £985 to Section 106, £10,200 to the Future Homes Standard, and £12,700 to environmental protections like biodiversity net gain and nutrient neutrality. When excluding a £37,000 rise related to materials and labor costs, the extra expenses caused by regulations and taxes amount to roughly £42,000. The Conservative figure is somewhat higher than the HBF’s, and it assumes that any savings would be passed on to homebuyers rather than increase developers’ profits.
Regarding the feasibility of these savings, Noble Francis from the Construction Products Association highlighted that regulations and taxes imposed in recent years considerably constrain the building rate of new homes, which remains below government targets. For instance, official data indicates that only about 203,000 new homes were built in England in the year to June, well short of the 300,000 annual goal set by the government. While Francis acknowledges it is easy for parties outside government to promise cuts in red tape, both Labour and Conservative administrations have added to housing costs over the past five years. Analysts also warn that while cutting construction costs may help increase homebuilding, it could reduce funding for necessary infrastructure that developers currently help finance. Environmental measures, such as the requirement for heat pumps instead of gas boilers, aim to lower household energy bills long-term, a point emphasized by Dr. Richard Lowes from the Regulatory Assistance Project, who cautioned that overlooking these energy implications could leave households facing high costs for decades
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