LendInvest and MDA Consulting have published a whitepaper to help property developers and lenders prepare for the introduction of the Building Safety Levy.
The mandatory levy is due to take effect in England on 1 October under the Building Safety Act 2022 and the Building Safety Levy (England) Regulations 2025.
The Government expects it to raise around £3.4 billion over 10 years to fund the remediation of historic building safety defects.
However, the paper warns that failing to calculate and fund the charge correctly could delay completions, block sales and prevent development loans from being repaid.
LEVY EXTENDS BEYOND HIGH-RISE
The levy will apply to residential developments creating at least 10 homes and purpose-built student accommodation schemes providing 30 or more bedspaces.
LendInvest and MDA Consulting stress that it is not limited to high-rise buildings and will also capture qualifying low and mid-rise developments.
Rates will vary considerably between local authorities, ranging from £12.70 per square metre in County Durham to £100.35 in the Royal Borough of Kensington and Chelsea.
Developments on previously developed land can qualify for a 50% discount where at least 75% of the consented site meets the statutory definition.
The whitepaper says developers will need robust evidence to secure the discount during underwriting.
‘DIRECT CASH COST’
The levy will become payable as a single upfront charge before the first completion or occupation certificate is issued. Building control bodies can withhold certification where it remains unpaid.
Building control applications submitted before 1 October 2026 will be exempt, provided work starts substantively within three years.
Dan Lohn (main picture, inset left), Relationship Manager at LendInvest, says: “With the Levy directly impacting scheme viability, cash flow timing and completion sign-offs, proactive partnerships are essential.
“By joining forces with MDA Consulting, LendInvest is delivering practical clarity on complex calculations, brownfield exemptions and adapted funding structures to help SME developers manage these obligations and keep projects moving forward securely.”
Chris Chadwick (main picture, inset right), Director at MDA Consulting, adds: “The Building Safety Levy is a direct cash cost sitting on every qualifying scheme’s balance sheet.
“Calculated on measured floorspace and varying by local authority, its mechanics demand disciplined, stage-by-stage verification so costs are not overlooked.”
Read the Whitepaper HERE.
