The new Building Safety Levy (BSL), designed to fund the remediation of historic fire safety defects, is scheduled to come into force on 1 October 2026. The levy will apply to new residential developments across England and has a target of raising £3.4bn.
Rates for the BSL are determined by local authority area, showing considerable regional differences. For instance, developers in Kensington and Chelsea will face a charge of £100.35 per square metre, while those in County Durham will pay £12.70 per square metre. The average cost to developers is projected to be approximately £3,000 per plot.
Mark Holloway, a partner at national law firm Foot Anstey, suggests that while the rationale for higher rates in high-value areas is to reflect greater capacity to contribute, this approach may overlook the strong influence of locality on development viability. He states that in lower-value regions, even modest additional costs could render schemes unviable, potentially worsening regional disparities in housing delivery.
The BSL is calculated per gross internal metre of floor area, including communal areas in apartment buildings, which could disproportionately affect higher-density schemes typically found in urban centres. The levy is policed through the building control regime, with full liability required before a final building control certificate is issued, meaning disputes could delay home occupation.
Critics argue that imposing this burden on future developments is questionable, especially as product manufacturers involved in historic defects are not subject to similar levies. The BSL does include exemptions for affordable housing and care homes, and a 50 per cent reduction for previously developed land.