UKAA responds to consultation on Building Safety Levy arguing the case for exemption for BTR developments

The UKAA today submitted a response to the Government consultation on the proposed Building Safety Levy, putting forward the case for Build to Rent developments to be exempt from such a levy due to the adverse impact it would have on viability.

The consultation sought views on the design and implementation of the Building Safety Levy – proposed by Government to raise funds to cover the costs of building safety expenditure. The UKAA, through its Research and Education Committee has responded on behalf of our members.

The UKAA submission argued the case for BTR investment, the importance of BTR development and that BTR should be excluded from such a levy.

Key points:

• BTR developments have a key role to play in addressing the housing shortage in England.  Rental housing provides affordable, high quality, secure accommodation for those whose access to home ownership is limited and helps to accelerate housing delivery. The growth of the sector is dependent on it continuing to attract capital investment.  
• A Building Safety Levy will impact on the viability of residential schemes already constrained by increased construction costs, lack of land availability, high land prices and increasing labour shortages
• An additional charge on development will likely depress the scale of new home building unless other charges are reduced correspondingly or land prices adjust
• This levy also comes at a time when the rental sector is facing a number of legislative changes (e.g MEES, renter reforms) – all of which are important – but which are placing a higher regulatory burden / cost on investors. The combined effect of these changes and the levy is likely to discourage investment in BTR
• The inclusion of BTR would fail to recognise that in many instances BTR investors will not have access to Government funding in relation to remediation of existing buildings and so the responsibility for remediation will often sit with the investor as landlord. Payment of the levy will therefore result in inherent unfairness to those involved in the BTR sector
• That Build to Rent should be excluded from the Levy due to the disproportionate effect on the viability of BTR schemes.

To see the full submission please click here.