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New Report Urges Local Authorities to Amend Planning Charges to Help Smaller House Builders

on Friday, 15 April 2016.

A new report has concluded that the planning charges set by some local authorities do not take into account the increased costs involved in building smaller housing developments.

The report – ‘Housing development: the economics of small sites – the effect of project size on the cost of housing construction’ was compiled by the Building Cost Information Service of the Royal Institution of Chartered Surveyor on behalf of the Federation of Small Businesses.

In its summary (See page 5), the report stated that, after analysing the data, the build cost expressed in pounds per square metre for all residential schemes of 10 units or less “is on average 6% higher than on large developments”, that “there is no evidence that it [the build cost] is taken into account when assessing the viability of smaller schemes” and that “some local planning authorities are setting section 106 or Community Infrastructure Levy (CIL) rates for smaller developments without making allowance for these extra costs”.

The report also stated that on a typical 1-10 unit housing development, the extra base construction cost would amount to more than £100,000.

The report concluded by recommending that local authorities and their advisers take into account the “higher construction costs experienced by smaller housing developments when carrying out viability appraisals for smaller housing sites of 10 units or less, setting CIL, or considering levels of contributions to be sought through section 106 agreements”.