Charges adding thousands of pounds to building costs to be axed
24 Mar 2014 11:57 AM
Proposals to save
householders thousands of pounds off the cost of building their own home
announced.
New measures will save
hardworking householders thousands of pounds from the cost of building their
own home under proposals out yesterday (23 March 2014).
Charges would be scrapped that
require a large payment and add considerable costs for people wanting to build
their own home or developers looking to build a small number of properties.
These reforms will help increase both house building and housing supply, and
lower the construction cost of new build housing and home
improvements.
A number of councils have
applied Section 106 charges which have made these types of development
unviable, such as a £32,000 charge that would be required to build a
self-build 2-storey 3-bedroom house in the New Forest, and a £20,000
charge to build 2 modest sized homes in Andover.
The charges, which can also be
applied to the building of extensions and annexes, require a levy for
affordable housing. This would be scrapped for self-builders, homeowners and
developers wanting to bring redundant buildings back into use along with
builders eager to make use of small sites to provide much needed housing. A
number of these schemes become economically unviable if forced to pay excessive
development charges.
The changes could provide a big
boost to builders keen to take on more work and will be further support for
smaller developers who can also benefit from the £525 million Builders
Finance Fund announced in the Budget which is targeted at small and
medium-sized builders.
Communities Secretary Eric
Pickles said:
People who have worked hard and
saved hard should be able to build a home or make changes to their property
without paying out excessive charges.
Their home should be their
castle and not a cash cow for their local council. They shouldn’t be
clobbered with thousands of pounds of charges just for building a house or
adding an annexe for an elderly family member.
There are too many levies and
charges on housing. By cutting these, we can help support hard working
families, give builders a boost and build more homes.
These proposals follow recent
changes which exempt self-builders and householders building extensions and
family annexes from paying Community Infrastructure Levy which had been placed
on building over a certain size.
Before the change excessive levy
payments meant that in some parts of London an average sized self-build house
could be hit with up to £43,700 of charges and outside London up to
£11,400 in levy charges were being imposed.
The proposed changes to Section
106 brings this charging into line with the infrastructure levy and is part of
the government’s determination to boost housing supply and help
hardworking families and aspiring self-builders get their home off the ground.
It also supports changes which mean from April there will no longer be a
Council Tax surcharge on family annexes.
The proposals outlined in a consultation launched today will exclude people building
domestic extensions and annexes from having to make levy payments to affordable
housing through Section 106 agreements.
Developers of smaller housing
schemes of 10 homes or fewer and those bringing disused buildings back into use
will also be exempt from affordable housing levies.