£76,000 Rise in New-Home Building Costs Threatens UK Housing Supply

The Home Builders Federation (HBF) says the average cost of building a new home in England has risen by £76,000 since 2020 – over 20 % of the median new-home price of £365,000 (June 2025). The increase coincides with a 16 % drop in completions to 208,000 homes in 2024/25, down from the 2020 peak.

Building a new home is now £76,000 more expensive than it was six years ago, HBF says

HBF attributes the £76,000 uplift to four elements: £37,000 material and labour inflation; £23,000 regulatory costs (building-regulation compliance, Biodiversity Net Gain and the Future Homes Standard); £7,000 taxes and levies (Landfill Tax, Building Safety Levy, other taxes and inflation-adjusted Section 106); and £7,000 site-specific costs such as nutrient-mitigation. Since 2020 the government added the Building Safety Levy (£3.4 billion, due Oct 2026), doubled Landfill Tax, mandated Biodiversity Net Gain and imposed the Future Homes Standard and 2021 interim building-regulation changes, adding roughly £10,000 per home.

Building a new home is now £76,000 more expensive than it was six years ago, HBF saysNew taxes and policy costs add £76,000 to the cost of building a new home, HBF finds

The federation calls for a moratorium on new policy costs, the cancellation of the Building Safety Levy, a halt to further Landfill Tax hikes, and a comprehensive review to remove overlapping regulations. HBF warns that without these steps private-sector and affordable-housing delivery will remain at risk.

New taxes and policy costs add £76,000 to the cost of building a new home, HBF finds

HBF says the cost surge shows the government’s assumption that rising expenses can be absorbed by lower land values is no longer viable. It likens the stacking of taxes, levies and regulatory demands to “having one foot on the accelerator and the other on the brake,” warning that the approach jeopardises national housing targets.

New taxes and policy costs add £76,000 to the cost of building a new home, HBF finds

All sources give the same £76,000 estimate; no independent audits or alternative calculations are cited, leaving a verification gap.

New taxes and policy costs add £76,000 to the cost of building a new home, HBF finds

• “If government wants the private sector to deliver, it must create the right conditions for it to do so,” — Neil Jefferson, Chief Executive, Home Builders Federation

Building a new home is now £76,000 more expensive than it was six years ago, HBF says

• “Without urgent action to review and reduce the overall cost burden, the delivery of both private and affordable homes will remain at risk, and people will continue to miss out on the homes they need.” — Neil Jefferson, Chief Executive, Home Builders Federation

Building a new home is now £76,000 more expensive than it was six years ago, HBF says

• “The government’s ambition for new homes relies heavily on private home builders to deliver, yet it is not providing the conditions for these businesses to operate.” — Neil Jefferson, Chief Executive, Home Builders Federation

New taxes and policy costs add £76,000 to the cost of building a new home, HBF finds

• “Reforming the planning system and reintroducing housing targets for local authorities was a vital first step in boosting supply, but doing so while layering on more taxes, levies and policy costs is akin to having one foot on the accelerator and the other on the brake.” — Neil Jefferson, Chief Executive, Home Builders Federation

New taxes and policy costs add £76,000 to the cost of building a new home, HBF finds

HBF will lobby the Department for Levelling Up, Housing and Communities for a policy review before the Building Safety Levy starts in October 2026 and seeks parliamentary scrutiny of the cumulative impact on housing supply.

New taxes and policy costs add £76,000 to the cost of building a new home, HBF finds