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The Building Safety Levy took effect in England on 1 October 2026. In a joint technical paper, LendInvest and MDA Consulting warn that qualifying residential projects should budget for it as a material cost due before the first completion or occupation certificate—not as a minor expense that can be funded later. That timing can put certification, sales and loan repayment at risk if the liability is missed or underfunded.
The paper is aimed at developers, lenders and monitoring surveyors. Its recommendations describe the co-authors’ view of prudent project controls; they are not evidence that every lender has adopted the same practices or that every project is liable. For a specific scheme, check the current rules and official guidance.
What is the Building Safety Levy?
The levy is a charge on qualifying residential development in England. The September 2026 paper by LendInvest and MDA Consulting says it applies to schemes with at least 10 dwellings or at least 30 purpose-built student accommodation (PBSA) bedspaces, subject to exclusions, exemptions and transitional provisions. A building’s height alone does not exempt an otherwise qualifying scheme.
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Clear out junk files and repair common Windows errorsFree Scan →Scan for outdated or missing drivers - takes under a minuteDriver Scan →Repair Windows errors before they cause bigger problemsFix Now →The government’s Building Safety Levy guidance, updated on 2 July 2026, links to the regulations and explains rates, calculations, developers’ responsibilities and local-authority collection. The exact rules and a project’s application and commencement history matter, so do not treat the headline thresholds as a complete liability test.
How is the levy calculated?
The paper describes the calculation as chargeable Gross Internal Area (GIA) multiplied by the applicable local-authority rate. The liable floorspace is not necessarily limited to individual dwellings: residential communal space may count, while commercial and qualifying exempt space is excluded. A mixed-use scheme therefore needs an appropriate breakdown and apportionment of floorspace.
The paper gives examples ranging from £12.70 per square metre in County Durham to £100.35 per square metre in the Royal Borough of Kensington and Chelsea. These are examples reported in the September 2026 paper, not a national rate or a substitute for checking the relevant authority’s current schedule.
When might a brownfield discount apply?
The paper says a 50% rate discount may be available if at least 75% of the land covered by the consent meets the qualifying previously developed land (PDL) criteria. A site should not be assumed to qualify simply because it is described as brownfield: the threshold and supporting evidence need to be established and verified before the discounted figure is used in a budget.
When is payment due, and why does it matter to lenders?
According to the paper, the levy must be paid before the first completion or occupation certificate. That creates a funding requirement before the project can reach that certification milestone. If the levy has not been adequately budgeted or the payment cannot be made when required, certification may be blocked, delaying completion, occupation, sales, refinancing and repayment of the development loan.
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For this reason, the paper recommends treating the liability as a fixed, senior-ranked project cost in the initial appraisal and structuring funding to cover a single pre-completion payment. Those are the co-authors’ recommendations, rather than independently verified descriptions of standard lender practice.
What should lenders and monitoring surveyors check?
The paper recommends that lenders and monitoring surveyors follow the levy through the project rather than relying on an early estimate that may become outdated.
- At appraisal: confirm the relevant local-authority rate and measured chargeable GIA; include the levy in the project cost plan.
- If a discount is assumed: test viability at the full rate as well, and verify that the PDL criteria and evidence support the reduced amount.
- During the project: revisit the calculation if design or other changes affect chargeable floorspace, and track the liability in pre-commencement and construction reporting.
- Before completion: confirm the liability notice and payment evidence, and ensure funding is available ahead of the first completion or occupation certificate.
LendInvest separately says it has adapted its underwriting models and facility structures to account for the levy. That is the company’s own account, not independent confirmation of lending-market practice.
Could a project fall under transitional provisions?
The paper says building-control applications submitted before 1 October 2026 fall outside the levy, subject to transitional conditions that include substantive commencement within three years. Whether a project meets the transition depends on its application type, dates and other facts; the paper’s summary is not enough to determine liability for an individual scheme. Check the official guidance and linked regulations against the project’s circumstances.
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What does the white paper contribute?
The 19-page paper, Building Safety Levy: Implications for Lenders & Monitoring Surveyors, was jointly published by LendInvest and MDA Consulting in September 2026. It states a policy target of raising £3.4 billion over ten years and focuses on the levy’s project-finance and monitoring implications. Its central practical point is that the charge has a defined pre-completion payment point, so the rate, floorspace, any discount and funding timing should be addressed in project controls early.
Read the LendInvest and MDA Consulting white paper. Mortgage Solutions also reported on its publication on 1 October 2026: LendInvest and MDA Consulting list potential lending implications.
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