Government rules can drive house prices up almost 60% in London, research suggests
Summary
A new Centre for Policy Studies report argues that government taxes, obligations and mandated requirements can add substantially to the minimum viable sale price of new homes, with the effect estimated at 57% for a brownfield apartment scheme in Inner London and 42% for a greenfield scheme in the Home Counties. The article also notes criticism of planning and policy costs, including affordable housing obligations, biodiversity net gain, and several taxes and levies, as barriers to viable development.
Why it matters
Surveyors involved in development appraisal, valuation and viability work may need to understand how policy-driven costs are being framed in current housing debates. The article highlights pressures that can affect scheme feasibility, land values and new-build pricing assumptions in London and beyond.
Key points
- CPS research says taxes and regulations can account for 57% of the price of a new flat in a London brownfield scheme.
- The report models a 100-unit Inner London apartment scheme at about £775,000 per flat versus a claimed market-clearing price of £333,000 without intervention.
- For a Chelmsford greenfield scheme, the report says viability requires around £535,000 per house, compared with £311,000 without government costs.
- Costs cited include affordable housing obligations, biodiversity net gain, planning costs, stamp duty, corporation tax and the Residential Property Developer Tax.
- The article also references criticism of price caps in the Your First Home scheme as part of wider concerns about geographical inequality.
This is an RPSA summary of a publicly available article. The full content remains with the original publisher.
