8 Comment


“One of the key challenges is that partial or staged payments are not allowed” Chris Hemmings


Rates for the new levy were published in March 2025 by the local authority area, with two rates set according to whether the site is brownfi eld or greenfi eld. T e rates vary across the country and are set according to weighted average house prices, with brownfi eld sites receiving a 50% discount compared to greenfi eld sites. So, for example the brownfi eld rate in Preston is £7.19 per m2 stark contrast to the greenfi eld rate in Guildford, of £46.15 per m2 a typical private three bedroom house (93 m2


, which is in . T e cost for


) on a greenfi eld site in Guildford


is typically £4,300 per unit, which is roughly 3-4% of the base build cost for that unit – so a small, but not insignifi cant number when applied to, say, 200 units. Some brownfi eld rates in London are even higher. For example in Westminster the rate is £49.01 per m2 £50.17 per m2


and in Kensington & Chelsea the rate is . We understand that the levy will not be subject to indexation, but


it will be reviewed every three years and could be adjusted at these intervals. T e timing of the introduction of BLS has been delayed by the Government


to 2026, but there is little acknowledgement of the rising cost burden from other legislative changes in recent years, such as Biodiversity Net Gain and other changes to the building regulations (Part L and F), coupled with rampant build cost infl ation and higher CIL and Section 106 contributions due to this infl ationary indexation. Building defects can occur on all types of housing sites, be it low rise


greenfi eld developments with a high proportion of houses, or large brownfi eld developments with apartment towers. In this respect, it seems fair to apply the BSL to all types of housing schemes, with the exception of minor developments, which in part provides some protection for local small scale developers.


However, SME developers would frequently face the cost because the threshold for major developments is just 10 homes. T is impacts SME developers disproportionately because they do not benefi t from the economies of scale that plc housebuilders can apply to construction costs. I believe the Government could seek a discount on the levy for SME developers to refl ect this, or as an alternative it could raise the threshold for paying, for example, to 50 units. One of the key challenges is that partial or staged payments are not allowed


and therefore the full amount for the scheme needs to be paid within the fi rst phase of development, placing additional fi nancial burdens on the project’s cashfl ow. For those developers constructing apartment schemes above 18 metres, there


is the triple challenge of not only the payment of the levy, but the requirement for the second staircase, which reduces the building’s effi ciency and net sales/ lettable area, and the need for sign off by the Building Safety Regulator and the costs and delays this inevitably causes. Depending on the scheme, the location, the site’s landownership history and


the transactional terms, it may not be possible to simply deduct the BSL from land acquisition costs. Moreover, while the BSL on its own is not necessarily a signifi cant drag


on the viability of schemes, when added to the ever growing list of planning obligations such as BNG and the requirement for second staircases, it is providing more incentive for developers to challenge planning obligations at application. T e introduction of the levy is already being factored into scheme viability, especially at the planning application stage, with developers including it within their fi nancial viability assessments for schemes that are timed to be commenced and not completed by Autumn 2026. T is has the impact of reducing the level of aff ordable housing further still as S106 contributions are usually fi xed amounts set by formula, and CIL is non-negotiable. With the Government’s 1.5 million housing target already under signifi cant


pressure, there needs to be some assistance to take the hand brake off and accelerate build rates, which could include incentives for both buyers and developers – and one potential incentive could be a delay to the introduction of the BSL.


Chris Hemmings is Partner (Development) at Carter Jonas (London) Housing Management & Maintenance August/September 2025


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