黑洞社区

Fears over the cost of the government鈥檚 proposed new building safety system are growing after it emerged that the reforms could cost the industry more than 拢1bn in their first three years.

An issued alongside yesterday鈥檚 黑洞社区 Safety Bill estimates that the residential development industry faces two-year transitional costs of 拢731m in moving to the new system, with an ongoing annual regulatory burden of 拢284m thereafter. The costs would add up to a bill of more than 拢3bn over the next decade.

These costs are on top of the 拢2bn developer levy already set out by the government, , and a further 鈥淕ateway 2鈥� levy expected to be paid by developers at the point of planning permission for high-rise buildings.

The government yesterday published the long-awaited , which is designed to put in place a new regulatory system for high-rise buildings, including the creation of a building safety regulator, and more protection for residents.

Law firm Winckworth Sherwood said developers will be 鈥渉it from all angles鈥� by the new system, with costs likely to impact on scheme viability.

The impact assessment says the overall transitional cost of moving to the new system is estimated at 拢812m over two years, with the vast majority falling on the private sector. Much of this transitional cost is made up from the requirement for owners of existing and new buildings to develop safety cases for all of England鈥檚 12,000 high-rise buildings covered by the new regime.

The department estimates that these buildings include around 444,000 homes privately owned by leaseholders.

The impact assessment says estimated ongoing annual costs of 拢426m, of which two-thirds will be borne by industry, are incurred for a combination of reasons, including the development of safety cases, the costs of meeting the new 鈥済ateway鈥� regulations for new buildings, the costs of construction products regulation, and the costs of duty holders under the new regime.

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This figure also includes the estimated 拢60m annual cost of the new regulator, around 90% of which is expected to be recovered from industry.

Charis Beverton, partner at Winckworth Sherwood, said the system 鈥渨ill inevitably increase the cost for developers鈥�, with tighter control of building products very likely to increase the price of approved materials, and maintenance of the 鈥済olden thread鈥� of building information adding 鈥渢ime and money to every build鈥�.

She said: 鈥淭hey will be hit from all angles, via the new developer levy, and with greater requirements for competency and training increasing already high labour costs.鈥�

She added that the combination of costs 鈥渕ay remove SME housebuilders from the high-rise market altogether.

鈥淎t the moment, the strength of the sales market might sustain extra costs but it won鈥檛 take a lot for it to affect the viability of new schemes. The government needs to be careful that its understandable aims on safety don鈥檛 stymie innovation in materials and building practices, limiting the ability of the industry to deliver green, efficient homes.鈥�

Developers have already warned that the introduction of new developer levies must be done in a way that . Others have also raised concerns that the measures on the industry.

While the government has said it expects its new developer levy to raise 拢2bn over the next ten years, it has not said how much it expects to be raised from the Gateway 2 levy.

All builders making a , even though the Home Builders鈥� Federation estimates that major listed builders have already contributed more than 拢500m to solving problems in existing homes.

Launching the legislation yesterday, housing secretary Robert Jenrick (pictured) said: 鈥淭he new building safety regime will be a proportionate one, ensuring those buildings requiring remediation are brought to an acceptable standard of safety swiftly, and reassuring the vast majority of residents and leaseholders in those buildings that their homes are safe.鈥�

, however, saying they were a 鈥渟ticking plaster鈥� that would not adequately help leaseholders living in blocks affected by the crisis.