Published: Thursday, 27th August 2015
A new report commissioned by the Federation of Small Business (FSB) suggests local planning authorities could inadvertently be costing small house builders millions of pounds.
The FSB argues the extra costs from Community Infrastructure Levy (CIL) charges risk blocking otherwise viable housing projects.
The FSB commissioned an assessment by BCIS, the building cost information service run by professional body RICS. BCIS found that on average, smaller house building projects of 10 units or less, typical of developments run by smaller firms, had significantly higher basic building costs. The difference lifted average house building costs by 14 per cent when compared to larger developments.
BCIS claimed there was no evidence of councils making allowance for these higher costs when stipulating the CIL charge.
BCIS calculations suggested that local authorities could be overcharging smaller house builders by as much as £100,000 per project.
This added cost was a significant burden to smaller house builders, and was likely to be pushing many much-needed urban brownfield housing projects beyond viability, claimed the FSB.
FSB National Chairman John Allan urged local planning authorities to adopt a more flexible approach on CIL. “They should consider the size of the proposed project when deciding how to set the levy, and ensure small house builders aren’t overburdened with unaffordable costs” he argued.