The National Federation of Builders (NFB) has responded critically to the Government's decision to remove a proposed exemption for medium-sized development sites from the Building Safety Levy (BSL).

The BSL is a levy on residential development intended to fund the remediation of buildings with fire and structural safety defects, primarily those identified following the Grenfell Tower fire. The levy applies per unit on qualifying new residential developments.

The NFB's objection centres on the removal of a proposed carve-out for medium-sized sites. The federation argues that this decision will impose an additional cost burden on smaller and mid-scale housebuilders who are already managing rising materials costs, labour shortages, and planning delays. Large-scale national developers absorb levy costs across higher volumes; smaller regional builders working on medium-scale schemes face a proportionally greater impact per project.

The Government has confirmed definitions within the BSL regulations and removed the exemption category in question, which the NFB says it had understood would provide relief to this part of the market.

What this means for trades

The Building Safety Levy is paid by developers, not directly by the trades who work on those sites. However, the cost feeds through to project viability calculations. If levy costs reduce the number of medium-scale residential schemes that proceed to planning or build stage, there is a downstream effect on the volume of work available to groundworkers, frame-up contractors, and finishing trades on those project types.

The NFB has called on the Government to reconsider the decision and to engage with the sector on the cumulative cost impact of recent regulatory changes.

Background

The Building Safety Levy was introduced following the Building Safety Act 2022. It is distinct from the developer self-remediation scheme under which major housebuilders pledged to fund the remediation of their own legacy buildings. The levy creates a broader funding pool from new residential development across the sector.

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