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Planning charges do not take into account higher build costs of smaller housing sites, report finds

A report commissioned by the Federation of Small Businesses has found that the planning charges set by some English councils do not take into account the increased costs of building smaller housing developments.

The report, carried out by the Royal Institute of Chartered Surveyors' Building Cost Information Service, found that average build costs are 6% higher for schemes with 10 homes or fewer than for larger residential developments, and 14% higher where such schemes comprise exclusively houses as opposed to flats.

The report states that this amounted to an increased base construction cost of over £100,000 on a typical housing scheme of between one and 10 homes. Additional allowances to cover costs including external works and professional fees, which are often based on base costs,

  • could amount to an uplift of more than 20% of the total construction cost.

The report says:

  • There is no evidence that the increased costs are taken into account when assessing the viability of smaller housing schemes and some local planning authorities are setting section 106 or Community Infrastructure Levy (CIL) rates for smaller developments without making allowance for these extra costs

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