The Building Safety Levy starts on 1 October. Four weeks out, the industry has put a number on how it expects that to land.
Research published on 18 August 2026 by the Home Builders Federation and Quantum Development Finance, based on a survey of SME house builders across England, found that 91% believe the levy will make developments financially unviable, and that 36% have already delayed, redesigned or cancelled schemes in anticipation of it. HBF is asking the government to pause the levy’s introduction pending a full assessment.
Survey findings are advocacy as well as evidence, and it’s worth reading them as such. But the underlying arithmetic is checkable, and for anyone pricing a scheme this autumn it’s the arithmetic that matters.
What the survey found
Beyond the headline figure:
- 69% of SME builders said the levy would make them less likely to invest in new development opportunities; a further 9% said it was too early to say.
- The effect is most pronounced in London, where 86.7% said it would make them less likely to invest — notable given the capital delivered 32,680 homes against a standard-method need of around 85,000 a year.
- Elsewhere: West Midlands 85.7%, South West 82%, East Midlands 78.9%, Yorkshire 76.9%.
Two structural complaints sit underneath the numbers. First, cash flow: SME builders pay the levy when the first home on a site completes, rather than as sales come through — which puts the charge at one of the tightest points in a project’s lifecycle. Second, scope: no exemption was made for medium-sized developments, so builders who have never built a high-rise are contributing to remediating high-rise defects.
HBF’s argument for a pause rests on the money already in the system: the industry has committed around £6 billion towards historic building safety costs, and more than £2.5 billion of the existing £5.1 billion Building Safety Fund remains unallocated. The government’s position, unchanged, is that the levy is needed to fund remediation at the scale required and that it has been through consultation and impact assessment.
Where the levy actually sits in the cost stack
This is the part worth knowing regardless of what you make of the campaign. HBF’s Viability Crunch report (published May 2026, updated July) breaks down what has been added to the cost of building a typical home over five years. Its total is £76,000 — around 20% of an average new home value of £365,000.
The components, as HBF estimates them, per unit:
| Cost line | HBF estimate per home |
|---|---|
| Material and labour inflation | £37,000 |
| Future Homes Standard (incl. 2021 Part L uplift) | £10,200 |
| Other Building Regulations changes | £7,770 |
| Nutrient neutrality mitigation | £7,000 |
| Biodiversity Net Gain | £5,700 |
| Building Safety Levy | £2,320 |
| Landfill Tax | £2,000 |
| Taxes (NI, Corporation Tax, RPDT) | £2,055 |
| Section 106 inflation | £985 |
For high-rise, HBF adds a further £22,272 per unit — of which up to £22,000 is attributed to the second staircase requirement taking effect on 30 September 2026 and £272 to Building Safety Regulator gateway application costs.
So the levy is one of the smaller lines. On HBF’s own figures it is roughly a fifth the size of the Future Homes Standard line and under a third of the “other Building Regulations” line. It’s also worth noting the levy is charged per square metre of gross residential floorspace, so on apartment schemes it captures circulation and other unsaleable space — which is why HBF puts the London apartment figure nearer £3,000 per unit.
The line that should interest assessors
The single largest regulatory item in that table is the one we work on every day. HBF attributes £10,200 per home to the 2021 Part L uplift and the Future Homes Standard together, driven principally by the solar PV requirement, which HBF describes as panels covering an area equivalent to 40% of ground floor area. HBF’s own analysis suggests around 60% of homes may not practically achieve that coverage, which is a claim worth treating as a starting point for debate rather than a settled fact, but it points at something real: where the roof cannot carry the assumed array, the deficit has to be made up elsewhere in the calculation.
The rest of that table breaks down as follows, on HBF’s numbers: Part G water efficiency changes at £3,100, Part M(1) accessibility at £1,800, Part S EV charge points at £870, and Part R gigabit infrastructure within a £2,000 cap.
None of these are arguments against the standards. But they do change where the effort should go. If FHS compliance is the largest single regulatory cost on a plot, then the accuracy of the inputs feeding that calculation stops being a technical nicety and starts being a commercial question. Default thermal bridging values, unmodelled junctions and conservative U-value assumptions all push the required specification upwards — more insulation, more glazing spend, more PV — to close a gap that may not exist in the built form.
What to do in the next four weeks
Confirm which side of 1 October each live scheme sits on. The levy applies to applications for building control approval submitted on or after that date. Applications made before it are outside the charge, even if varied afterwards — but a pre-October application that is rejected and resubmitted becomes liable.
Pull your local authority’s rate. Rates are set per authority and weighted by local house prices, ranging from around £13/m² to over £100/m². The brownfield discount is 50%. On a scheme of any size, the difference between authorities is material.
Check the reliefs before assuming liability. Social and supported housing, and all works by non-profit registered providers, are outside the charge entirely.
Don’t rush an incomplete submission to catch a date. A thin application invites questions, and questions cost more time than the levy costs money. If a scheme is going in before 1 October, the compliance evidence needs to be ready to go with it.
The bigger point
The cost stack is real, and the industry is right that it has been assembled department by department without anyone adding it up. The response available to a developer, though, isn’t to argue individual lines down — it’s to make sure the ones that are calculated rather than fixed are calculated properly.
ΨMonkey models thermal bridging PSI values to BR 497 and BRE IP 1/06, so the junctions in your SAP assessment carry their real heat loss rather than the pessimistic defaults. On an FHS plot, the difference between calculated and default y-values routinely moves the specification — and therefore the build cost — by more than the Building Safety Levy will.
And if you’d like the Part L, Part G and thermal bridging package for a scheme sorted before it goes to Building Control this month, get in touch.
Sources: Nine in ten SME house builders warn Building Safety Levy will make even more sites unviable — Home Builders Federation, 18 August 2026 · The Viability Crunch — Home Builders Federation, May 2026 · Building Safety Levy: Guidance, GOV.UK · The Building Safety Levy (England) Regulations 2025, legislation.gov.uk