The Building Safety Levy will cost eight times more in London than County Durham

The Building Safety Levy (BSL) set to come into force on 1 October 2026, is expected to impose an average cost of £3,000 per plot on new residential developments in England. This levy aims to raise £3.4bn and will apply to new residential developments based on local authority areas, with rates ranging from £12.70 per square metre in County Durham to £100.35 in Kensington and Chelsea.

The disparity in rates stems from the BSL being payable per gross internal metre of floor area, including communal areas for apartment buildings. This disproportionately affects higher-density schemes typical in town and city centres, making them less viable. Developers typically assess financial obligations during the planning phase, incorporating these costs into land acquisition and development appraisals.

The BSL adds an extra compliance process that must be managed, assessed, and budgeted for, with full liability for payment required before any building control final certificate is issued. Critics argue that developers should not bear this burden while product manufacturers involved in historic defects are exempt. However, viable alternatives for funding historic remediation are limited.

Large corporate developers are already subject to an additional four percent tax on profits, and over 50 developers have pledged £3.3bn for voluntary self-remediation. While exemptions exist for affordable housing, care homes, and previously developed land, the BSL could still lead to fewer homes being delivered due to increased viability pressures and ambitious housing delivery targets.