link to ringley website
  • Home
  • About Us
    About us & leadership Awards Savings for Clients Case Studies Green Management Strategies Market Overview Leasehold Reform Campaign Money Back Guarantee
  • Our Services
    • Asset Management
      • UK Asset Management
      • Project Monitoring
      • ESG Consultancy & Implementation
      • PropTech & Living Sectors Platform
      • Marketing Insights
      • Resident Journey
      • Stabilised Assets
      • UK Build to Rent
      • UK Later Living
      • UK Co-Living
      • UK Student Accommodation
      • UK Single Family Housing
    • Block Management
      • Overview - London
      • Overview - Wales & West
      • Overview - Southwest
      • Right to Manage
      • Freehold Management
      • Resident Management
      • Estates of Houses
      • Ground Rent Collection
      • How to change agent?
      • Block Management Services
      • Can't afford an agent?
      • Legal & Tribunals
      • Top 10 Tips
      • Report an incident
    • Commercial Management
    • Law
      • Overview
      • Meet The Team
      • Recommendations
      • Right to Manage
      • Lease Extensions
      • Freehold Purchase
      • Absentee Freeholder
      • Court Appointed Manager
      • Conveyancing - Wales
      • Conveyancing - England
      • Service Charge/Rent Arrears Recovery
      • Company Secretary
    • Property Valuations
      • Overview
      • Loan Security
      • Company Accounts
      • Lease Extensions
      • Freehold Purchase
      • Rent Reviews
      • Ground Rent Investment
      • Development Valuations
      • Expert Witness & Litigation
      • Tax, Trusts & Accounts Valuations
      • Trading Business
      • Compulsory Purchase
      • Residential Valuations
    • Engineering
      • Overview
      • EWS1 Consultancy
      • Asbestos
      • Contract Administration
      • Fire Assesment
      • Homebuyer Survey
      • Building Survey
      • Schedules
      • Party Wall Matters
      • Principle Designer
      • Disability Access Audits
      • Small Building Works
      • Fire Door Inspection
      • Insurance Valuations
    • Property Accounting
      • Finance
      • Quote For Service Charge Accounts?
      • Property Accounting Law
      • Accounting Updates
      • To Audit or Not?
    • Plant & Facilities Management
      • Plant & Facilities Management
      • Fire Door Inspection APP
      • Fire Safety Update
    • Site Staffing Solutions
      • Ringley Integrated Site Staff Solutions
    • Leasehold Guidance
      • Overview
      • Right to Manage
      • Purchasing The Freehold
      • Court Appointed Manager
      • Absentee Freeholder
  • Insights
    Asset Management Articles Block Management Blogs Publications BTR Rental Market Blogs Customer Insights FAQ - Ask Our Experts Insurance Calculator
  • ESG
  • E-books
  • Get In Touch
  •    
  • Work with us
  •  
  • Portal Login
Build to rent developments will have to pay new building safety levy

Written by: Mary-Anne Bowring 16/02/2024
  407       0
Responsive image

Build to rent developments will have to pay new building safety levy

The UK government recently announced it would include Build to rent developments in its latest building safety levy framework. This thwarts campaigns to exclude them because Build to Rent developments are not sold to leaseholders so Build to Rent developers already have to self-fund or seek redress through their development procurement agreements.

What is the building safety levy for brownfield sites?

However, the government has also included a major provision that will undoubtedly support build to rent developers where developments situated on brownfield sites will only face a 50 percent charge under this levy scheme. There were many responses after the announcement, reflecting varying sentiments. Some respondents voiced support for imposing the building safety levy, contending that developers reap significant profits from such projects. Large-scale development projects, categorised by their scale and long-term investment nature, can yield lucrative returns over time. By including these developments in the building safety levy, supporters of the provision suggest that developers should contribute a fair share towards ensuring the safety and compliance of their properties.

Arguments why build to rent developments should pay towards the 2024 building safety levy

Noise against the build to rent camp voiced concerns about the potential unfairness of treating Build to rent developments differently from properties intended for sale. They stressed that developers in the Build to rent sector also vie for land with those focused on for-sale properties. That is why excluding Build to Rent from the building safety levy could confer an unfair market advantage to developers in this sector.

Other viewpoints included suggestions that imposing the levy on Build to rent developments could contribute to a more equitable tax distribution. Thereby helping to reduce the overall levy rate for all properties.

Arguments why build to rent developments should not pay towards the 2024 building safety levy

Conversely, advocates of excluding Build to rent developments from the new 2024 building safety levy argued that developers in this sector generate profits gradually over an extended period, unlike the immediate returns typically seen from the sale of individual properties upon completion. The value of an unbroken building for rent is calculated on a yields basis (rent x yield = capital value) and this is usually less than the sum of the individual apartments for sale values. Therefore, other arguments is that if the capital value or end sale/proceeds are depressed why should the new building safety levy apply.

There is widespread concern that imposing the building safety levy on Build to rent projects might impose excessive financial burdens on developers. The worry being that pressure on costs could render some development sites economically unviable, leading to potential delays or cancellation of projects - this being against the backdrop of a national housing and rental crisis.

Pundits argue that exempting Build to Rent from the levy is warranted because of the nature of these developments often being situated in densely populated urban regions where housing demand significantly surpasses available supply. In this context, build to Rent projects become socially important as they play a key role in contributing to easing housing shortages in these high-demand areas. All that said the argument that carries the most weight it that a building safety levy on Build to rent developments is unfair as such projects are not sold leasehold. Therefore, developers of Build to rent properties do not have access to government assistance to address building safety concerns, unlike developers in other sectors.

Reasons why the UK government says build to rent developments should pay towards the 2024 building safety levy

In its defence, the UK Government argues that the decision to incorporate Build to rent developments into the building safety levy was made after careful consideration. The government acknowledges the distinct profit models between Build to rent and for-sale properties but maintains that both sectors are profitable segments of the house-building sector. Excluding Build to Rent from the levy would create a competitive advantage, considering that both sectors vie for land in a similar fashion.

The Impact of the New Building Safety Levy on the Build to Rent Sector

The inclusion of Build to rent developments in the 2024 building safety levy marks a significant shift in the UK housing sector. While it aims to ensure fair contributions towards building safety, it has sparked debate due to the sector's unique business model. Developers must now carefully consider the financial impact of this levy, as it could affect the viability of certain projects. The government’s approach highlights the need for a balanced strategy that supports safety and affordability while considering the long-term goals of addressing the housing crisis. It remains to be seen how this levy will ultimately affect the Build to Rent sector’s role in tackling the UK’s housing shortage.



Property Management Block Management
POPULAR POSTS

Solar panels on flats - what you need to know

Is noise getting you down?

Ground Rent: Fines for Landlords Who Charge Ground Rent

High Court: Right to Rent does breach human rights

Landlords beware - Don't believe everything you read!

RECENT POSTS

The UK Government Takes Decisive Steps to Meet Its Target of Delivering 1.5 Million Homes

UK Leasehold Reform: Moving Towards Commonhold Ownership

Government to Introduce Single Construction Regulator by 2028 in Response to Grenfell Inquiry

Real Estate Experts Urge House of Lords to Amend Renters Reform Bill

Real Estate Developers Boost Investment in UK Student Accommodation Sector



Blogs related:

ASSET MANAGEMENT
UK Help For Household Campaign Aims To Reduce Energy Bills Through A Series of Steps
The UK Government announced the Energy Price Guarantee scheme to reduce the unit cost of electricity and gas for UK households from 1st October. The scheme is available to all, and there is no need for anyone to apply. This scheme is in addition to the £400 energy bill discount already available for all households. This automatic, non-repayable discount will be applied in six installments from October 2022 to March 2023 to help households deal...

Read


ASSET MANAGEMENT
Will Co-living transform urban landscapes as an affordable housing solution?
Co-living is a popular option where the renter gets a small self-contained apartment and then shares living spaces with others. Amenities on offer include communal cooking areas, cafes, swimming pools, resident lounges, and games rooms. A sense of community is fostered through events from circuit training to pitch deck evenings and TED talks. Bills are included and often deposits are not required.Will Co-living transform urban landscapes as an...

Read


ASSET MANAGEMENT
Office Downsizing to Coworking - Understanding Post-pandemic Workplace Trends
Office Downsizing to Coworking - Understanding Post-Pandemic Workplace TrendsMost companies, regardless of size, shifted to remote work as soon as the pandemic started hitting nations across the globe. Organizations realised the high costs of maintaining office spaces as offices wore a deserted look for months. The flexibility of workspace and work hours are the buzzwords as office-based working returns after the long spell of work-from-home. ...

Read


Meet our Expert Property Commentators

Mary-Anne Bowring FTPI FRICS FARLA FCABE Founder/Head of Asset Management

Strategic partnerships, holistic delivery/ opportunities, growth, value engineering, thought leadership

Ian Barber MD BTR Mobilisation & Leasing

Runs HQ & site lease-up teams. Drives rent pricing, mobilisation, marketing, happy residents!

Jon Curtis MRICS Head of Building Engineering

Chartered Building Surveyor. Lectures on EWS1 & building safety. Runs CapEx programmes.

Kate Robinson MTPI MD Blocks/FM Management (London Region)

Master plan setup, ops and staffing and resident engagement. ISO45001 champion.

Lee Harle Partner Ringley Law

Plot conveyancing. Debt litigation. Group Company Secretary.

Anthony Kingdon MIRPM AssocRICS MD Blocks/FM Management (North Region)

Stakeholder engagement. Mixed tenure specialist. Budget management. Plant audit, PPM compliance.

Chris Georgalis MRICS Head of Commercial Valuation

Chartered Valuer. Rental valuations: retail, leisure. IRR modelling and valuations for secured lending. Compulsory purchase & rent reviews

Nichola Pughe MRICS Head of Residential Valuation

Chartered Valuer. Rental development & mixed use valuations, IRR modelling. Leasehold enfranchisement specialist

Natalie Birmingham Helpdesk Support Manager

Trainer & Helpdesk Manager: people, systems,contractors. ISO45001 supply chain accreditation.

Steve Norman Planning Director

Land due diligence (opportunities & constraints) Has contributed to a number of award winning schemes.


inshights shared - link to planetrent blogs

Landlord blog
Read landlord blog
inshights shared - link to ringley blogs

Property blogs
Read property blogs
inshights shared - link to ringley articles

Property articles
Read property articles
inshights shared - link to ringley ebooks

E-books
Read E-books

link to ringley social media facebook link to ringley social media instagram link to ringley social media linkedin link to ringley social media x-twitter
link to ringley social media x-twitter for small device
link to ringley social media linkedin for small device
link to ringley social media instagram for small device
link to ringley social media facebook for small device
  • Ringley Group
  • About us
  • CSR / ESG
  • BusyLiving
  • PlanetRent
  • Talk to us
  • Careers
  • Ask a Question
  • Insights
  • Articles
  • Blogs
  • Subscribe
  • BTR & PRS Buildings
  • What we do
  • Asset Management
  • Block Management
  • Facilities Management
  • Property Law
  • Surveying / Valuation
  • Building Engineering
  • Financial Services
  • Managing Agents
  • Block Management Locations
  • Co-working
  • Renting & Letting
  • Right to Manage
  • Contractor Management
  • Space to Work
  • Fees and Client Money Protections
  • Email: solutions@ringley.co.uk

  • Emergency line 1: 0207 428 2056

  • Emergency line 2: 0207 267 2900

  • Report an incident
  • Our Offices
  • London
  • Ringley House
  • 1 Castle Road
  • London
  • NW1 8PR
  • T: 0207 267 2900
  • London
  • Ringley House
  • 47 Rochester Place
  • London
  • NW1 9JL
  • Manchester
  • 11 Swan Street
  • Northern Quarter
  • Manchester
  • M4 5JJ
  • T: 0330 174 7777
  • Cardiff
  • 122 West Bute Street
  • Cardiff Bay
  • Cardiff
  • CF10 5LJ
  • T: 0330 174 7747
Privacy Policy
Ringley Staff Dashboard
link to ifsm website link to tpi website link to tpos website link to rics website link to ukgbc website link to government security industry authority website link to alep website

All content © copyright 2025. Ringley Limited. All Rights reserved. Ringley Limited, incorporated and registered in England and wales. Registered office: Ringley House, 1 Castle Road, London, NW1 8PR. Company No. 03302438
Terms of use | Privacy Policy | Modern slavery act | COVID-19 risk assessment