Committee publication · Correspondence · 4 February 2026
Letter from the Home Builders Federation to the Chair dated 23 January 2026 concerning the Affordability of Home Ownership
From: Housing, Communities and Local Government Committee
Inquiry: Affordability of Home Ownership
Summary
The Home Builders Federation writes to the HCLG Committee Chair following oral evidence on 6 January 2026, elaborating on viability pressures facing housebuilders. The letter details how a 48% viability crisis exists outside London; explains how accumulated taxes, levies, and regulatory costs have increased build costs by 30–35% while home prices rose only 7–10%; argues that effective demand (mortgage availability) constrains investment and build rates; rebuts claims about unbuilt planning permissions; and highlights how past government schemes like Help to Buy successfully unlocked housing supply by supporting demand.
Key findings
- 48% of England outside London is unviable or marginal for residential development; regulatory and policy costs have increased by over £100,000 per typical home in the past five years, outpacing price growth.
- Central government tax and levy claims on land value (RPDT, Building Safety Levy, Biodiversity Net Gain, new homes levy) now rank ahead of local developer contributions, squeezing the available funding envelope for community infrastructure.
- The mortgage market for new builds is a constrained sub-market with few lenders offering less competitive terms than for older properties; new build apartment lending is particularly tight (85% LTV typical), directly affecting investment appetite.
- Claims of 'one million unbuilt permissions' are flawed: many are outline only (requiring discharge of dozens of planning conditions), double-counted, or delayed by external factors (Section 106 delays, nutrient neutrality, Building Safety approvals, infrastructure gaps).
- Help to Buy (2010s) generated over £1.2bn profit for taxpayers by end-2024/25 and doubled housing output from 125,000 to 250,000 annually; government support schemes historically unlock effective demand and builder confidence in multi-year investment.
Tone
ProceduralTopics
Key actors
Florence Eshalomi MP, Home Builders Federation, David O'Leary, Housing Minister, Chief Executive of the Planning Inspectorate, Competition and Markets Authority, Zoopla
Notable line
“… central government claims on land value via these new policy costs, taxes and levies all trump the claims of local communities through developer contributions.”
Key Quotes
“Zoopla found that 48% of England (outside of London) is either unviable or marginal for residential development.”
“… housebuilding has faced significant challenges over recent years – including the impact of the coronavirus pandemic, increased construction costs, high interest rates, regulatory changes and wider economic conditions.”
“HBF estimates that the regulatory, fiscal, materials and employment costs involved with building the typical new home have increased by in excess of £100,000 in the past five or so years.”
“There is a limited envelope of land value that can be provided to meet public policy objectives and over recent years an increased proportion of this value is being extracted by Whitehall departments.”
“… lowering their prices is more likely to bring sales of these homes forward in time, rather than increasing their overall sales over the medium term.”
“One of the primary reasons for a housebuilder to hold land is to ensure it has a steady supply of land to feed into its business. Without the supply of developable land, no new houses can be built, and the housebuilder's business cannot exist.”
“By March 2025, just under half of the 387,000 equity loans issued under the programme had been fully repaid at an average uplift of around 10%. Help to Buy has therefore generated a positive return – effectively profit for taxpayers – of more than £1bn on the loans repaid by March”
Source · parliament.uk record ↗