The NHF submitted a response to the latest consultation on the Building Safety Levy, and has made the case for measures to ensure that the levy will not have an adverse impact on the supply of affordable homes.
In late 2022, the Department for Levelling Up, Housing and Communities (DLUHC) started consulting on the technical details and implementation of the Building Safety Levy, which is being introduced to fund the removal of unsafe cladding.
The latest consultation, which closed in February, followed an earlier consultation in the summer of 2021. At that time, it was anticipated that the levy would raise at least £2bn over a 10 year period, and would be charged on the development of residential buildings that are at least 18m in height or seven storeys high. However, the latest consultation says that £3bn is now needed, and that the levy will be charged on all new residential dwellings that require building control approval in England.
It is anticipated that the levy will be collected as part of the building control process and will be payable by the ‘client’ in relation to a development. The term ‘client’ is loosely defined as any person or organisation for whom a construction project is carried out.
The latest consultation sought views on whether the levy should be charged on a per unit or per square metre basis, and whether different rates should be set for different geographical locations and depending on whether it is a brownfield and greenfield development.
The consultation document gives no start date for the levy, but suggests a transitional arrangement whereby projects that are at commencement stage of the building control process on the date the levy goes live will not be subject to the levy, nor will projects that have entered the building control process on the date the levy comes into operation provided they commence within 12 months.
Fortunately for housing associations, the consultation anticipates a number of relevant exemptions – in particular:
While the NHF is supportive of the policy intent behind the Building Safety Levy, it is concerned that the levy could result in a loss of funds from the social housing sector. Therefore, in addition to endorsing the above exemptions, the NHF has called for:
It seems likely that the Building Safety Levy proposals will require considerable development, and so it may be some time before the levy is introduced. In the meantime, the NHF has requested further dialogue with DLUHC to discuss the potential impact of the levy on the social housing sector in more detail.
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