Eric Pickles has offered a boost to the country’s small house builders, slashing the cost to them of building a new home by as much as £140,000.
The Communities Secretary said the move would help restore the sector which was hit by the 2008 crash, and boosting local jobs and constructions.
Figures from the National Housebuilding Council have suggested that the number of small and medium-sized builders has halved, from 6,167 in 1997 to 2,832 by 2012.
Plans announced today will boost England’s builders, making clear that most “Section 106” charges should not be sought from the smallest housebuilders – specifically on sites of 10 homes or fewer, including self-build, extensions and annexes.
Mr Pickles also confirmed that in very rural areas, sites of 5 homes or fewer should not face the charge.
He also launched a £25 million fund to boost development finance for small builders.
Eric Pickles said: “Small builders are being hammered by charges, which have undermined the building industry, cut jobs and forced up the cost of housing. By getting rid of these 5 and 6-figure charges, we will build more homes and help provide more low-cost and market housing.
“This will also be a massive boost to the self-build and custom-build sector. Overnight in many parts of England, it will be cheaper to build an extension, a family annex or just build your own home. Our long-term economic plan is helping hard-working people.
Protecting small builders
It is estimated that the policy will save, on average, £15,000 in Section 106 charges per home in England – with some councils charging up to £145,000 on single properties.
Further savings will be made from tariffs councils can use to charge more than £15,000 per home over and above any housing contributions.
Taken together, these changes will provide 6-figure savings for small-scale developers in some parts of the country.
This will also support the nation’s self-builders – ensuring any builder helping to turn someone’s dream home into a reality, or build an extension to an existing property, doesn’t get lumbered with Section 106 charges, mirroring what the government has already done on exempting them from community infrastructure levy.
Unlocking stalled smaller sites
Mr Pickles also announced plans for a new £25 million fund to unlock construction on micro-building sites between 5 and 15 homes.
These sites have local support and planning permission secured, but have struggled to get restarted after being mothballed during the downturn.
This new funding will come in the form of loans, which the developer will repay on completion and sale of the homes.