UK: Builders warn of rising costs and project delays

Specifically, the Home Builders Federation (HBF), representing the UK housing industry, welcomed the government’s recent interventions in the relevant regulations but emphasized that the measures are insufficient to meaningfully reduce the pressure faced by industry players.

At the center of the debate is the Biodiversity Net Gain (BNG) framework, established under the 2021 law, which requires every new development to deliver at least a 10% net increase in biodiversity compared to the previous state of the site. According to HBF research, 84% of homebuilders report that implementing the measure remains challenging, while nearly three in ten (29%) describe the requirements as “very difficult” in practice. Only 4% of respondents consider the targets easy to achieve. Although these figures show a slight improvement compared to the previous year—when 92% of builders reported compliance difficulties—the sector maintains that the framework continues to act as a deterrent to new investment.

It is notable that 60% of companies indicated that BNG requirements influenced their decision not to develop plots that would otherwise have been utilized.

Challenges for the sector
The situation is particularly acute for small and medium-sized enterprises (SMEs) in the industry. According to the survey, 37% of smaller builders describe the rules as “very difficult” to implement, compared with just 13% of larger firms. The sector warns that this may undermine the government’s target of delivering 1.5 million new homes by the next general election, as slower permitting processes and rising costs directly impact investment activity.

Meanwhile, smaller developers speak of an “existential crisis,” as they face both environmental compliance requirements and challenging market conditions. Around 70% of SMEs report that the current economic environment discourages the start of new projects, with conditions even more difficult in London.