MPs call for more affordable homes – but is tightening developer rules the right answer?

There’s been a lot of noise this week about a new report from MPs calling for tougher rules on land-value capture and higher affordable-housing contributions. On paper it sounds admirable. In practice, it shows just how far removed Westminster can be from the real world of housing delivery – especially here in the South West.

We all agree that more affordable housing is needed. No one in development is arguing against that. But the assumption that developers and land promoters are sitting on deep pockets that can simply be tapped harder is completely disconnected from reality.

Take the data: Zoopla’s latest national viability report shows that building new homes is not financially viable across almost half of England. In many other areas, schemes only just scrape by. When nearly 50% of the country can’t viably deliver housing under current conditions, the idea of adding more financial pressure on development feels completely counter-intuitive.

And it’s not just planning contributions. Alongside this political pressure to “pay more”, there is a wave of new taxes and charges landing on developers that directly impact viability too:

Building Safety Levy – an additional charge on new residential development at a time when build costs and regulation have already climbed significantly

Landfill tax reforms – proposals to phase out the lower rate of Landfill Tax could represent a 3,000% increase on certain waste streams for development sites

These aren’t insignificant tweaks – they’re major cost pressures. And they all land on the same balance sheet government wants to squeeze further. A good example of the disconnect: on one hand we hear “build baby build”, and on the other we face “tax developers more, add new levies, ask for greater contributions – even where viability is already marginal or non-existent.”

It’s the left hand talking growth while the right hand quietly closes the door on it.

Here in the South West, land values are already under severe pressure. Many sites struggle to stack financially even before any extra burdens are proposed. SME developers are being burnt across the country, they are disenfranchised by the bureaucracy of the system and all these additional barriers to development. These are the very firms that build local markets, tackle smaller or complex sites, support local trades and apprentices, and bring character and quality to regional development. If nothing changes, more will close and the government will miss its housing target by a greater margin!

The idea that more financial pressure – more obligations, more contributions, more hoops – will magically speed up housebuilding misunderstands the economics of development entirely. When viability fails, schemes don’t get redesigned – they get shelved. And when that happens, no homes get built, affordable or otherwise.

What’s needed isn’t more pressure – it’s more support. Faster, clearer planning decisions. Realistic viability expectations. Infrastructure support for constrained areas. Backing SME developers. Policy certainty so land deals can move with confidence.

From where we stand, policy that chokes viability is policy that chokes housing supply. The goal is right, but the mechanism is backwards. You don’t build more homes by making it harder to build homes. You don’t protect affordability by destroying the viability needed to create supply.

We need a planning and funding system that recognises the role SMEs play, supports land values at sensible levels, and backs the people actually delivering sites on the ground. Because unless something changes, we’re not heading toward an era of increased housing delivery – we’re heading toward fewer builders, stalled land, and communities waiting even longer for homes that never come forward.

We remain committed to unlocking land and working with local partners to deliver high-quality homes in the South West. But that only works if the system supports viability and backs the builders who form the backbone of this industry.

It’s time for policy built on real-world delivery, not theory. Otherwise we risk losing the very people capable of solving the crisis we all agree needs urgent action.

Read the Zoopla report here [https://www.zoopla.co.uk/press/releases/building-new-homes-not-financially-viable-across-half-of-england/]