Would the Conservatives' Plan Make New Houses £50,000 Cheaper?
By Ben Chu, Policy and Analysis Correspondent, BBC Verify
Published 31 minutes ago
Conservative shadow chancellor Andrew Griffith has proposed a significant reduction in the cost of building new homes in England and Wales. His party aims to cut £50,000 off the price of a new home by streamlining regulations.
The £50,000 Figure
The £50,000 figure, according to Griffith, aligns with industry estimates of the costs associated with new regulations and taxes. However, construction and housing experts caution that these savings might indirectly lead to increased government spending on schools, roads, and affordable housing.
Sources of Cost Increase
The Conservatives attribute several regulations to the rising cost of constructing and delivering new private homes:
- Community Infrastructure Levy (CIL): A charge on new developments in England and Wales, allowing councils to fund local infrastructure.
- Future Homes Standard: This regulation mandates higher energy efficiency standards for new-build homes and the use of low-carbon heating systems, such as heat pumps, instead of gas boilers.
- Section 106: Requires developers to provide a portion of social or affordable housing as part of new developments in England.
The Tories plan to scrap or reform these regulations, claiming these changes will cut the cost of new homes by up to £50,000.
Industry Perspectives
The Home Builders Federation (HBF) estimates that since 2020, new regulations, taxes, and inflation have increased the cost of building an individual new home in England and Wales by £76,000, representing around 20% of the average new home's value. The HBF's breakdown includes:
- £985 from Section 106.
- £10,200 from the Future Homes Standard.
- £12,700 for environmental protection measures.
Excluding labor and material costs, the HBF estimates that regulations and taxes have added approximately £42,000 to the cost of building a new home, slightly lower than the Conservatives' figure.
Achieving the Savings
Noble Francis from the Construction Products Association (CPA) acknowledges that new regulatory costs have hindered residential construction rates. He also notes the UK is behind its target of building 1.5 million net additional dwellings in England over the current parliamentary term.
However, Francis raises doubts about the feasibility of the Conservative plan, suggesting it "easy for any party not in government to justify" such proposals without providing a clear path to achieve the claimed savings.