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Builders warn new water charges could delay and curb new housing

Published: Thursday, 8th September 2016

Home Builders Federation complain that Ofwat’s proposed charging regime changes for new water and sewerage connections will cause huge increases in costs for developers…

House-builders have cried foul over the latest changes to the charging regime proposed by economic water regulator Ofwat for new water and sewerage connections.

Developers have claimed that the proposals, the subject of a recent consultation exercise, have the potential to result in “huge increases” in costs for developers as well as delaying the delivery of new homes.

Trade body the Home Builders Federation (HBF) has complained that the latest proposals allow individual water-only and water and sewerage companies too much freedom in setting charges. “The current proposals area nothing more than a weak, directional protocol that will leave the water companies free to carry on as before” stated the HBF.

The house-builders have warned that the new charging regime will take the sector back to the infrastructure “free for all” that occurred in the period immediately following water privatisation in 1989.

The HBF said: “The approach now advocated is unlikely to facilitate the provision of new homes. Rather, it has the propensity to introduce barriers to housing deliver through compromised project viability, in addition to delaying new site starts”.

The builders have calculated that the approach to charging advocated by Ofwat could see single sewerage infrastructure charges ranging from the current £367 per dwelling to one “conceivably” in excess of £10,000 per dwelling.

The HBF has also voiced concern that Ofwat is relying on disputes between developers and water companies being settled by legal action.

“Disputes have wider cost and delay implications” stated the HBF. “Placing a greater reliance on dispute resolution through the courts rather than through effective regulatory control will result in further expense and delay” it insisted.

Read the Home Builders Federation’s news story.

Roger Milne