Typical new build homes in the South contain “hidden costs” of around £55,000, an influential thinktank estimates.
The Centre for Policy Studies (CPS) says many buyers are unaware of the amounts built into the price of their new property. Housebuilders are passing on the extra costs they incur to meet affordable housing and net zero requirements, for example, the Daily Telegraph reported recently.
Alan Hibben, an Associate of the CPS, says the price of an average £450,000 new-build home in southern England includes more than £50,000 in extra amounts that are not detailed to buyers.
These costs include £10,000 for ‘biodiversity net gain’, and £30,000 for planning obligations, which could be for affordable housing or local roads. Other extras are made up of planning fees and planning delay costs.
Hibben said his calculations showed the “hidden nature of these costs and the impact of policy decisions on affordability”.
“Policy objectives for the country as a whole are being put on the backs of home buyers, rather than general taxation, so that the costs can be hidden and builders to blame, rather than politicians,” he said, adding: “Successive British governments have buried new taxes, fees and charges inside other systems, especially planning.”
Hibben concluded: “The result is a housing market in which public-policy costs are embedded in the price of a home, while political debate proceeds as if buyers were paying only for land, labour and materials.”
