THE PROPERTY FILTER TAKE
New-build homes in southern England carry around £55,000 in embedded regulatory and planning costs, according to the Centre for Policy Studies (11 August 2026)
That figure equals roughly 12% of an average £450,000 new-build price, and it sits underneath the sticker price whatever discount a developer offers
Investors weighing new-build against older stock may wish to model this regulatory premium against refurbishment costs before committing to a purchase
According to the Centre for Policy Studies (11 August 2026), new-build homes in southern England carry around £55,000 in regulatory and planning-related costs, all baked into the purchase price. That works out at roughly 12% on top of an average £450,000 new-build in the region, before you've even picked a kitchen worktop. Buyers rarely see this cost broken out anywhere.
Where the £55,000 goes
Alan Hibben, an Associate of the Centre for Policy Studies, calculated the breakdown behind the headline figure. His analysis found more than £50,000 of the price of an average £450,000 new-build in southern England sits outside land, labour and materials. Around £10,000 comes from biodiversity net gain (BNG - a rule requiring developers to leave natural habitats in a better state than before building starts) requirements. A further £30,000 is tied to planning obligations such as affordable housing contributions and local infrastructure funding, typically delivered through Section 106 agreements (payments developers make to local councils as a condition of planning permission). The remainder comes from planning fees and the cost of planning delays. Add it up and the Centre for Policy Studies lands on the £55,000 figure, close to 12% of the purchase price.
If you're sourcing new-build stock, that's not a rounding error. It's a fixed cost structure built into every unit on a site, and it doesn't move much between plots.
Why the cost stays hidden
Hibben's argument isn't just about the number, it's about where the number goes. "Successive British governments have buried new taxes, fees and charges inside other systems, especially planning," he said. He argued that policy objectives such as affordable housing and environmental protection are being funded through home buyers rather than general taxation, which keeps the true cost out of political debate. According to the Centre for Policy Studies, this lack of transparency contrasts with approaches taken in other countries, where such costs are more visible to buyers.
Worth restating: this figure applies to southern England specifically, not the UK as a whole. The Centre for Policy Studies didn't publish equivalent numbers for other regions in this analysis, so don't assume the same 12% uplift applies in the North or in Scotland.
The angle worth watching
Here's the opportunity most buyers miss. If £55,000 of a new-build's price is a fixed regulatory cost the developer can't discount away, the real negotiating room on new-build deals is thinner than it looks. That £55,000 doesn't disappear when a developer offers "£10,000 off" at completion. It's already sitting underneath the sticker price.
That pushes the maths back towards older stock. A refurbishment project doesn't carry the same BNG or Section 106 burden, so the margin on this can be wider once the works are priced properly. Before weighing a new-build against a renovation project, run both through a stress test calculator so the regulatory premium on one side is measured against refurb costs and contingency on the other.
Watch this area if you're active in new-build sourcing. As BNG and planning obligation costs firm up across more sites, the gap between new-build asking prices and what older, unregulated stock can deliver may widen further. If you're quick to model both sides, that gap is where the deal sits. Anyone building a pipeline around this should compare new-build premiums against period stock systematically rather than site by site, which is where deal-sourcing software earns its keep. For the wider playbook on finding and negotiating deals like this, the property deals mastery hub and the deal sourcing blog both cover the sourcing side in more depth. Factor stamp duty into any comparison too, since it applies on top of whichever price you're paying, and PF's stamp duty calculator gives you that figure in seconds.
Key takeaways
- New-build homes in southern England carry around £55,000 in embedded regulatory costs, according to the Centre for Policy Studies (11 August 2026) - That's close to 12% of an average £450,000 new-build price, split across BNG requirements (£10,000), planning obligations (£30,000), and fees or delay costs - Investors comparing new-build against older stock may wish to model the regulatory premium against refurbishment costs before committing to a purchase
Frequently asked questions
What is biodiversity net gain (BNG) and why does it add to new-build costs?
Does the £55,000 regulatory cost figure apply across the whole UK?
Can buyers negotiate these regulatory costs out of the purchase price?
