The British Property Federation (BPF) has called on the government to exempt build-to-rent and other forms of rented housing from its forthcoming Building Safety Levy, after a consultation closed this week.
The levy, which was first announced in February 2021, will see developers pay a contribution on each new residential property they work on as part of the building control process. It is part of government efforts to ensure that leaseholders avoid, as much as possible, paying for remediation work on their blocks amid the ongoing building safety crisis.
The levy is in addition to Michael Gove’s high-profile developer contract, unveiled last month, and the residential property developer tax.
The BPF called for build-to-rent, purpose-built student accommodation and older people’s housing to be excluded from the levy to help investors continue to have confidence in the sector.
The group said that rental developments are not part of the leasehold sector, which means owners are not seeking to pass on remediation costs to leaseholders.
At the same time, owners do not have access to the government’s Building Safety Fund, the BPF said.
“The combination of having no access to public funds and being within scope of the proposed levy would impact on investment across the rental sector and constrict supply,” said Ian Fletcher, director of policy at the BPF.
“In a shrinking development market, where tenants and students are already struggling to find accommodation, these rental sectors are key to sustaining supply and keeping construction workers in employment.”
Meanwhile, the Home Builders Federation (HBF), which represents the UK’s biggest house builders, spoke out as a consultation on the proposed levy closed this week.
A spokesperson for the HBF told Inside Housing: “A further £3bn raid on UK house builders to fund blocks built by others would reduce investment, threaten jobs and be a further hit to housing affordability for a generation struggling to get on the housing ladder.”
The UK’s biggest house builders have warned that they are already cutting back on new schemes amid a downturn in the housing market. However most major house builders are still recording vast annual profits.
The HBF said it had worked with government to “deliver solutions for leaseholders”.
The spokesperson added: “The industry has committed more than £2.5bn to carry out building safety work on all their own buildings and is already paying another £2.5bn tax to remediate those built by foreign companies and other parties.”
The group also criticised the government for failing to get the firms that produced the materials used on unsafe buildings to contribute to remediation work.
The spokesperson said: “Whilst ministers have talked tough and set ultimatums for the cladding manufacturers and material providers at the centre of this crisis, they have failed to get any contribution whatsoever to help ease leaseholders’ plight.”
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