New homes carry £38,000 in new red tape costs since 2020

House builders now absorb more than £38,000 of extra regulation, tax and policy costs on every new home compared with 2020, according to the Prosper UK Housing Commission. The body, led by former housing minister Gavin Barwell, says government requirements account for roughly half of a £76,000 rise in the total cost of delivering a typical home over six years. The other half — about £37,000 — comes from materials and labour inflation.

The commission's findings turn a familiar viability argument into hard arithmetic. Extra rules and taxes, it says, are pushing schemes that once worked into the red.

Where does the £38,030 come from?

The commission itemised the regulatory load per home since 2020:

• Future Homes Standard — £10,200
• Building regulation changes — £7,770
• Nutrient neutrality — £7,000
• Biodiversity net gain — £5,700
• Building Safety Levy — £2,320
• Developer tax and NI increases — £2,055
• Landfill tax — £2,000
• Section 106 increases — £985

The Future Homes Standard is the single largest burden. Building regulations and nutrient neutrality follow close behind.

What does this do to scheme viability?

The commission modelled a 300-home build-to-rent scheme. In 2020 it would have returned an £8 million profit. Today the same scheme would generate a £6 million loss because of the extra burdens. That is a £14 million swing on one project.

High-rise flats fare worse. Industry estimates cited in the report put cost growth at around £98,000 per apartment since 2020 for schemes caught by the Building Safety Regulator regime — roughly two and a half times the regulatory load on a typical home.

What is the commission proposing?

The commission calls for a three-year freeze on new regulatory burdens affecting housing. It also wants a review of whether existing costs should continue to be loaded onto new homes at all. Specific asks include changes to biodiversity net gain and nutrient neutrality requirements, plus a rethink of the Future Homes Standard itself.

Barwell framed the recommendations as a package rather than a menu. "Our recommendations are not 'Pick N Mix'. Boosting demand without increasing supply will help a few people at the expense of everyone else, and tackling viability without tackling demand will make little difference," he said.

What does it mean for practitioners?

For developers and their design teams, the report reframes the planning debate. The report warned that efforts to speed up planning risk being undermined if the cost of actually building consented homes continues to rise. Faster consent means little if appraisals fail at the viability stage — and on the commission's numbers, each new home now carries a regulatory bill approaching the price of a small flat a decade ago. Whether government accepts the freeze or not, the itemised breakdown gives negotiators a documented basis to challenge further cost stacking in future policy rounds.