Building Safety Levy (England) Regulations 2025

Lord Young of Cookham Excerpts

Wednesday 15th October 2025 Grand Committee

[The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government (Baroness Taylor of Stevenage) (Lab)]

My Lords, these regulations were laid before the House on 10 July 2025. The Government are committed to the remediation of residential buildings with unsafe cladding in England. Our remediation acceleration plan sets out how we will remove barriers so that buildings are fixed faster. Crucially, this will allow residents to be and feel safe in their homes.

The Government have already committed £5.1 billion of taxpayers’ money to the cost of remediation. We want to protect leaseholders and residents from further costs that are not of their making. The building safety levy is an essential step in achieving this. The purpose of the levy is to fund the Government’s building safety remediation programme. We estimate that we need to raise around £3.4 billion over 10 years. The draft regulations enable the levy to be imposed. The levy will be charged on certain building control applications for new residential floorspace in England. Subject to the approval of the Committee, it will start being charged from 1 October 2026.

Local authorities will collect the levy on behalf of central government. They are well placed to carry out this role as custodians of local building control, with tax collection expertise. I thank local authorities for the vital role they will play and for the steps they are already taking to prepare. My officials are supporting local authorities to ensure that they are ready for the levy launch. We will provide collecting authorities with grant funding for set-up costs. All ongoing costs will be recoverable from the levy revenue received.

The levy provides essential funding to deliver a safe built environment that meets residents’ needs. It complements our broader housing goals, including the delivery of 1.5 million high-quality homes over this Parliament. The levy is designed to minimise detrimental impact on housing supply while securing the required revenue. To achieve this, there are different levy rates for each local authority, which reflect local house prices. This protects viability in areas where house prices are lower. The differential rates are set out in the instrument. Development on previously developed land will benefit from a 50% discount rate. This discount compensates for the often higher cost of developing this type of land, ensuring that more sites remain viable.

The Government are committed to getting Britain building again. Small and medium-sized builders play a crucial role in driving up housebuilding rates but have faced significant challenges in recent years. In fact, just before I came here, I had a very interesting meeting with a round table of SME builders, so I know the immediate challenges they are facing. We are therefore helping SME developers by exempting developments of fewer than 10 dwellings from the levy charge.

Earlier this year, we announced the biggest boost to social and affordable housing investment in a generation. The building of more good-quality, affordable housing must be accelerated. With this in mind, all affordable housing is exempt from the levy charge. However, we have gone further, and any housing built by a non-profit registered provider of social housing is also exempt. Profits from sales of such homes are often reinvested into the provision of further much-needed affordable housing. Supported housing and other types of important community facilities, such as hospices and care homes, are also exempt from the charge. We will keep the rates and processes under review and will report at least every three years. With that, I beg to move.

[Lord Young of Cookham (Con)]

My Lords, I am grateful to the Minister for her explanation of this substantial SI. Although the formula on page 15 may have deterred the casual reader, I found the Explanatory Memorandum at the end a helpful summary of what is proposed.

I welcome the measure as it is a key part of the package proposed by the previous Government to fund remediation costs after the Grenfell tragedy. Although there is an element of rough justice here, in that developers which were not even around at the time of the Grenfell tragedy will have to pay, the alternative—the remediation costs in those cases where the developer was not remediating the building falling entirely on the taxpayer and/or the leaseholder—was even less palatable.

As the Minister said, this SI originates from the Building Safety Act 2022. At first sight, a delay of four years before it is introduced and a further delay before any money is paid are difficult to justify, given the urgent need to make progress with remediation. However, that does not matter; perhaps the Minister can confirm this. Although the taxpayer contribution is capped at £5.1 billion, the Treasury is, as I understand it, prepared to lend the department additional funds should that cap be reached; it will then recoup the money from future levies. As there is no sunset clause, the levy will remain in place until the Treasury is back in funds.

I have two main concerns about the building safety regime: the speed at which it is happening and the exemptions from the Building Safety Act. I made these criticisms of the previous Government, as noble Lords who were there may recall, and tabled amendments—unsuccessfully—to a variety of Bills. So there is nothing partisan about my remarks.

First, on speed, the department published its remediation portfolio dashboard showing the position as at the end of August this year. Of the 5,554 buildings covered by the Act—buildings are still being uncovered—35% had had their work completed and 14% had work under way. This means that, more than eight years after Grenfell, work has not actually started on over half of the buildings at risk.

The dashboard does not label this as “work not started”. Instead, there is a Whitehall euphemism describing it as “in the programme”. The next time my wife asks me why I have not unloaded the dishwasher, I will say that it is in the programme. Seriously, though, this means that thousands of people are still trapped in unsellable homes with unsafe cladding and fire safety defects, often with high service charges and high insurance—

[The Deputy Chairman of Committees (Baroness Scott of Needham Market) (LD)]

My Lords, I apologise for interrupting the noble Lord but the House is about to divide; the Bells will ring in a moment so this would be an appropriate time to adjourn the Committee for 10 minutes.

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[Lord Young of Cookham (Con)]

My Lords, I was explaining that the publication of the remediation portfolio dashboard showed that thousands of people are still trapped in unsellable homes with unsafe cladding, fire safety defects and, often, high service charges and insurance. That is why, writing in the British Safety Council magazine in July, the organisation End Our Cladding Scandal said:

“But on the ground—in the eyes of residents and leaseholders who remain trapped—nothing has changed”.


It went on to say:

“Labour … is failing to deliver on its manifesto commitments on building safety”.


Those are its words, not mine. The Government have a target to complete remediation by 2029 for high-rise buildings and by 2031 for 11-metre to 18-metre buildings. Some 14 years after the tragedy, surely we can do better than that. The Government’s initiative is called the remediation acceleration plan, so might we have some acceleration?

My second point concerns exemptions. The original proposition was that leaseholders, who bear no responsibility at all for what has gone wrong, should not have to bear the costs of putting things right, but that principle has been eroded: some buildings, leaseholders and defects do not qualify. For example, buildings under 11 metres do not qualify even if they have the same cladding as the Grenfell Tower.

The previous Government argued that, in those cases, there was no threat to life as people could escape. But that left the leaseholders in difficulty. In one case, Aviva insisted on cladding removal within 4 months as a condition of insurance cover, with no one else prepared to quote. Leaseholders had to pay £45,000 each. There are many other examples, such as insurers wanting combustible balconies replaced or people being unable to sell because their lender insisted on an EWS certificate, which could not be provided. Those leaseholders have no protection.

The latest RAP—remediation acceleration plan—announces the Government’s intention to

“provide funding in those exceptional cases where multi-occupied residential buildings under 11 metres have life-critical fire safety risks from cladding and do not have an alternative route to funding”.

However, what the insurers and lenders insist on is often not “life-critical”, but the property is unsellable or uninsurable without the work, so the leaseholders have to pay to put the defects right.

There is a separate category of non-qualifying leaseholders—people who invested their life savings in a small number of buy to lets. Where the block is being remediated not by the developer but by the building safety fund, they are exposed to the full costs of non-cladding remedial work—often a high five-figure sum. As this work is carried out at the same time as the cladding, this can hold up remediation for everyone, as the freeholder will not have the cash to pay if a non-qualifying leaseholder cannot pay or sell. In Wales, there are no non-qualifying leaseholders. Those leaseholders are no more responsible for the defects than any other leaseholder. It is a distinction that should be removed, not least to accelerate the progress of remediation.

Some defects are not covered. The 2025 update to the remediation acceleration plan refers only to “unsafe cladding”, often leaving leaseholders exposed to other costs. Again, that is a distinction that should not be there. The leaseholders have no more responsibility for the non-cladding defects than the cladding defects. Those leaseholders who enfranchised, encouraged by successive Governments, are now in a worse position than those leaseholders who did not enfranchise—another inequity.

I make two final points. The Government said in their manifesto:

“We will put a renewed focus on ensuring those responsible for the building safety crisis pay to put it right”.


This SI is about the developers, but what about the construction materials industry, found by the Grenfell inquiry to have been guilty of “systematic dishonesty” and “making false claims” and by which not a penny has been paid? Eight years after Grenfell, the latest update tells us that the Government are consulting on

“robust sanctions, penalties and liabilities for manufacturers”.

Again, progress has been far too slow.

Finally, we know that the Government plan to legislate to address some of the problems I have been outlining. On 6 October, the Secretary of State wrote to End Our Cladding Scandal, saying:

“This will include a new Bill in Parliament to ensure that delinquent buildings get fixed”.


I understand that the Bill will have a hard end date for remediation, with criminal prosecution if it is not done. But this suggests that delinquent buildings will not get fixed until we have the Bill, implying yet further delay. We are told it will be introduced when parliamentary time allows, but that sits uneasily with the Government’s commitment to move things at a faster pace.

Does the Minister understand the frustration of those who, through no fault of their own, face hardship and risks? What can she do to reassure them that the Government will address with renewed urgency the problems that confront them?

[Lord Fuller (Con)]

My Lords, I declare my interest as a freeholder of a mixed-use building, 15 metres tall, constructed in 2018—post Grenfell—in Norwich. Addressing the consequences of the use of aluminium composite materials in pre-Grenfell tall buildings is the priority that the Building Safety Act is meant to resolve and a commitment that should remain undimmed. Unlike my noble friend Lord Young, I will constrain my comments to the effect of the proposed regulations, which are contemplated to be introduced on 1 October, on the construction of new homes, not existing homes. That does not mean I do not care about the existing homes, but I think we need to view part of these regulations through the lens of the construction industry.

It is common ground that we need more homes, driven not only by the UK population, which the ONS tells us is now just shy of 70 million, but because you cannot sell capitalism to people who cannot accumulate capital—and the best way of doing that, for most families, is by building a stake in their own home. Nothing we do should discourage or disincentivise the need to build the homes our nation needs.

There are enough headwinds in construction already and the Minister probably has some of those ringing in her ears from her lunchtime meeting with SME builders. There are more headwinds to come. The BSA levy is potentially one of those headwinds and could chill construction still further at a very delicate fiscal moment. That is important because if there is no building, there is no levy and there is no money to fix the cladding.

We know that there is a crisis of confidence in London’s building industry. I will focus on London for the moment because a lack of housing starts in London is going to imperil the Government’s nationwide housebuilding ambitions. All historic sources on housing starts point to London being in crisis. The Molior data shows that just 2,000 private homes were started in the first half of the year—a record low. MHCLG data shows that the total number of homes started in the entirety of the 12 months to quarter 1 2025 is 60% lower than the previous record low, set in 1990. The GLA’s affordable data shows that only 347 homes were started in Q1—a record low, following lows in 2024-25. Right up to date, the interim statistics show that in the last quarter for London new starts were 40% lower than the previous low point, with nothing over 18 metres started anywhere.

Developers in London are on strike, and if we cannot sort out building in London, we will never get roofs over people’s heads nationally. This is not just about the levy holding things back; house prices have risen in the capital by 1% since 2015, a previous high point. Berkeley Homes tells me that the bill costs have risen by over 40% in the same period—directionally, half on materials and half on regulatory burdens. So we know that viability is under threat. Planning has previously been fingered as the hold-up for development, but now if you get your planning consent, you need to get building safety regulator approval before you start digging foundations for all the dwelling homes that are excluded from the levy. It is therefore the building safety regulator that is putting speed bumps in the way.

These regulations provide for applications to be made to the regulator before 1 October next year or the levy will apply. That sounds like a long way away, but I am told it is currently taking 44 weeks, at best, for the regulator to reply to an application. More often than not, that reply is in the negative. I have heard of a refusal from the regulator that was evidenced by a single word: “Roof”. That is just not good enough. It is already too late to apply and hope for an approval, with just 50 weeks to go until 1 October 2026. That is also not helping many of the thousands of already completed homes in London that are doing nothing but eating their heads off in interest for want of a final approval.

I have done some research and learned that the reasons for all this relate to the fact that staffing and the transition have not been sorted out between the HSE and the building safety regulator. There is far too much subjective interpretation between professionals, each of whom may be correct in their difference of preference, but either option could be safely implemented. The regulator’s IT system is incompatible with the software that all developers use, particularly because it does not use the indexes. That is important because rather than someone going online, clicking on the screen and being transported instantly to one of the thousands of A0 plans through the index, the regulator’s IT system—I am told—means that you have to search manually through all 1,000 sheets. It is hardly surprising that it is taking so long. We then have the numbers: an additional £60 to £70 per square metre in London—and up to £90 in Fulham—and directionally £25 to £35 elsewhere.

I have consulted developers. More than ever, time is money. Reluctantly, they are prepared to accept the levy—that is good news; there is an alignment on the need and the willingness to pay. But their view— I agree with this, and I ask the Minister whether she does too—is that, before the levy comes into play, the building safety regulator needs to sort out its relationship with the HSE. The software needs to be made compatible with BIM, so that we actually get some productivity. We have to agree to objective, accepted standards for what is an acceptable way of building new homes, rather than be subject to arbitrary preference. There needs to be a response within four weeks and not 44 weeks.

If the builders are making that proposal, I think that it is a fair bargain and that the Government should accept it. Unless they do, the developers’ strike will continue and then no levy will be created at all. That does not help anybody, still less the people for whom my noble friend Lord Young is most concerned.

It is important that we think also about the cash flow. I have looked carefully at the regulations and the implementation. I am concerned that, particularly for a large-scale flatted development, should one go ahead, the entirety of the levy—remember, that it is £90 per square metre in Fulham—would be paid on the entire development at the point at which the very first part of that development had a completion certificate. Just at the point at which the developer is suffering greatest cash stress, the entire bill would be due. I am concerned for the cash-flow viability of these organisations, noting that the Financial Times has reported that, in the entirety of London—a city of 10 million people—in the last quarter, fewer than two dozen new flats have been sold. That is a real crisis point.

Will the Minister recognise that until the system is working smoothly, nobody will start anything over 18 metres and that unless we can get the workability, timescales and IT right, the strike will continue? Will she give a commitment that, at the point at which the levy is introduced, approval times will be down to, say, a reasonable four weeks, because time is money and money is risk? On that basis, there will be a grudging acceptance—but an acceptance none the less—by the industry that we can move forward, and then the people for whom my noble friend Lord Young is most concerned can be remediated more quickly. Unless we get an accommodation between the Government and the development industry on going forward positively, this will not be sorted out and the Government will stand zero chance of meeting their ambitious housing targets, which we should all endorse.

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[Lord Jamieson (Con)]

I declare my interest as a councillor in central Bedfordshire. Fortunately, we do not have many high-rise buildings in rural areas.

In response to the Building Safety Levy (England) Regulations 2025, the principle is absolutely right that those who have profited from residential development should contribute to the cost of making homes safe. It is both fair and necessary. This levy was set up by the Building Safety Act 2022 under the previous Conservative Administration, and it is an important part of wider efforts. I make very clear that we support this, but some issues need addressing.

The Government anticipate that the levy will raise approximately £3.4 billion over the next decade to help fund remediation of historic safety defects, including dangerous cladding. For too long, thousands of residents have lived in buildings that they know are unsafe. They suffer the stress and emotional toil of being in an unsafe building and, as my noble friend Lord Young of Cookham pointed out, they are unable to sell and to move on with their lives. The situation is not of their making. My noble friend made a number of points, and it is crucial that this is done faster and better. I would very much like to know whether the Minister believes that the two deadlines of 2029 and 2031 will be achieved given that, as my noble friend pointed out, around half have not even started. I cannot remember the exact phrase—

[Lord Young of Cookham (Con)]

In programme.