More SME builders at risk of folding if forced to pay to clean up England’s rivers

Housebuilders have hit out at plans to buy ‘nutrient credits’ for building on protected wildlife sites where pollutants such as nitrogen and phosphorus have leached into rivers.

They claim many smaller developers will go out of business when the new nutrient mitigation scheme goes live early next year.

National Federation of Builders, NFB, housing and planning head Rico Wojtulewicz said: “It’s farcical. We are paying for someone else’s mistake.”

The building industry claims intensive farming is the real culprit with fertilisers and animal excrement from pig and poultry farms the main cause of river pollution.

Home Builders Federation, HBF, said described the £30m government scheme as a ‘wholly inadequate’ solution.

Communications director Steve Turner said: “We have over 100,000 desperately needed new homes on hold despite the fact that all parties accept their construction would barely contribute to the nutrients issue.”

The Natural England is inviting developers in the Tees region to apply next March to buy credits to build in the area with additional mitigation projects identified over the next three years.

Housebuilders maintain the government’s requirement for water companies to improve their waste treatment works to remove nutrients by April 2030 is too long to wait.

“Far more decisive and proportionate action is needed to prevent businesses going bust, jobs being lost and further delaying homes for young people and families,” said Mr Turner.

Currently, there is a planning moratorium on housebuilding in large swathes of England including parts of the Northeast, Cumbria, Devon, Dorset, Somerset, Herefordshire and southern Hampshire.

Over one in five councils are affected.

Property agents Savills calculated back in 2021 that 33,000 new homes a year weren’t being built due to nutrient neutrality rules. It’s estimated this figure has probably doubled as the number of local authorities affected by nutrient neutrality rules has increased from 32 to 74.

Property finance intermediary Hank Zarihs Associates said development finance lenders were concerned that SME builders were already grappling with extensive overheads without being lumbered with a new tax burden.

Nutrient neutrality rules are a result of an EU court of justice decision in late 2018 on the interpretation of the habitats directive.

The new nutrient mitigation scheme is an amendment to the levelling up and regeneration bill that went through its third reading in parliament this week.