Mounting red tape threatens to drive out small and medium firms, federation tells Callcutt review

Housebuilders have warned the government that its regulatory policy threatens to undermine its goal of building more homes.

The response of the National Federation of Builders to the Callcutt review of housing delivery, seen by Building, warns that the proposed regulations threaten to undermine the viability of developments.

It said: “The cumulative cost of these items, plus increasing Section 106 and infrastructure requirements, is reaching a tipping point where viabilities, particularly of previously developed land with high existing use value, are being threatened.”

It says red tape is driving many small and medium-sized firms out of the market, fuelling the trend towards greater concentration of ownership. It states in its response: “The burden of compliance from all these agencies is very considerable, particularly for smaller and medium-sized housebuilders and is often cited as a reason for leaving the industry.

“The industry and government policy appears to be on a collision course, which is unlikely to see housebuilding output increase and it could even decline.”

The federation says the focus on the housebuilding industry’s business model was misplaced. It says: “Inadequate land supply and increasing costs and complexity of regulation are the issues that should concern ministers, not business models.

It also criticises the pressure to produce good design. “Much of the ministerially led debate about design is entirely irrelevant to purchasers and thus to housebuilders and is, if anything, an obstacle to increasing output and providing customer satisfaction.”

John Stewart, director of economic affairs at the Home Builders Federation, said he broadly agreed with the NFB analysis.

He said: “The complexity and the amount of regulation is now becoming so enormous that it poses a risk to our ability to deliver the 200,000 homes per annum.

“One of the reasons is that every piece of regulation tends to be treated in isolation.”