Today’s stories are two sides of the same regulatory calendar: developers are racing to submit Gateway 2 applications before the Building Safety Levy lands on 1 October, even as separate trade data shows housing starts have fallen off a cliff across the board. Layer on landlords facing another leg up in buy-to-let borrowing costs as swap rates spike, and it’s a day about the cost of building and lending catching up with everyone at once.
Housing starts are down more than a third on the year — and the levy is one reason why
Glenigan’s September Construction Index, reported by Property Investor Today on 10 September, shows residential construction starts fell 15 per cent in the three months to the end of August against the previous quarter, and 36 per cent against the same period last year. Private housing starts alone dropped 8 per cent quarter-on-quarter and 37 per cent year-on-year, while social housing fell 29 per cent and 30 per cent respectively. Glenigan’s Allan Willen said the sector’s “freefall, which began in Q2 has finally ground to a halt,” even if “activity levels remain painfully low.” The report names developers “reassessing site viability due to weak house sales and elevated construction costs, including the forthcoming building safety levy” as a direct driver of the private-housing slowdown.
The line about the levy is the one worth reading twice. A charge designed to fund building-safety remediation is now showing up, on the housebuilding industry’s own trade data, as a reason some sites don’t get built at all — which is exactly the trade-off ministers accepted when they introduced it, but it’s still an uncomfortable one for anyone relying on new supply to ease the affordability pressure documented everywhere else in this market. The 30 per cent fall in social housing starts is arguably the more troubling of the two numbers, since that’s stock without a private-sector viability calculation to fall back on if the sums don’t work.
If you’re advising on a stalled or marginal site, get the levy’s actual cost into the viability appraisal now rather than treating it as one more line item — on this data, it’s already the deciding factor for some schemes, not a marginal one. Anyone banking on new-build completions to ease pressure on a local market in the next year should mark that expectation down.
Gateway 2 applications are surging — because everyone’s racing the same deadline
While overall starts fall, the Building Safety Regulator’s own figures, reported by Construction Enquirer, show 1,654 Gateway 2 applications for higher-risk buildings now live, an increase of more than 100 in a single month, which the trade press links directly to the same Building Safety Levy taking effect on 1 October. The regulator made 340 decisions in the 12 weeks to 31 August, approving 84 per cent, covering more than 18,000 homes, with new-build determination times down to a median 22 weeks from 43 previously, after BSR expanded its technical team to 177 staff plus 508 external specialists. Acting chief executive Charlie Pugsley credited the improvement to “the expanded technical workforce and closer collaboration with applicants.”
Read next to the Glenigan numbers above, this is the same deadline producing opposite effects on different cohorts: schemes far enough along are rushing to beat the levy, while schemes that were never viable enough to reach Gateway 2 are the ones being shelved before they get there. A faster Gateway 2 process is genuinely good news for anyone with a live application, but it says nothing about the schemes that quietly never joined the queue.
If you have a higher-risk building scheme anywhere near submission-ready, get it into Gateway 2 before 1 October — the improved determination times mean a complete application now is more likely to be rewarded than it would have been a year ago. If a scheme is still short of that, budget the levy into the numbers from the outset rather than hoping for a late exemption.
Swap rates are pushing buy-to-let costs up again, and 1.8 million landlords are about to feel it
As LandlordZone reported on 11 September, five-year swap rates climbed above 4.5 per cent in early September, their highest level in around three years, prompting HSBC, NatWest, Barclays and others to raise fixed buy-to-let rates by 25 to 40 basis points within days of each other. Two- and five-year fixed BTL products now typically sit between 4.8 and 5.5 per cent, against roughly 1.8 million UK fixed-rate mortgages due for renewal this year, many of them landlords coming off deals fixed at 1.8 to 2.4 per cent in 2021. On a £200,000 interest-only loan, the article’s own worked example shows a move from a 2.1 to a 5.2 per cent rate adding roughly £516 a month, over £6,000 a year, to the interest bill alone.
This lands on landlords already navigating tighter Interest Coverage Ratio stress tests, typically 125 to 145 per cent of the mortgage payment, at the same time as the Renters’ Rights Act limits how freely a cost increase can be passed on through a mid-tenancy rent rise. A landlord who fixed in 2021 and assumed a like-for-like remortgage was in for a shock even before this week’s repricing; the swap-rate move makes that shock larger again.
If your fix ends in the next six to twelve months, get a rate modelled or booked well before the renewal date — rates have moved meaningfully in the fortnight this data covers alone, and a broker who can lock a rate ahead of completion is worth the conversation even before you’re ready to commit.
What I’d actually do
- Advising on a stalled or marginal development site? Put the Building Safety Levy’s real cost into the viability appraisal now — on this week’s data, it’s already deciding which schemes get built.
- Managing a higher-risk building scheme near submission-ready? Get it into Gateway 2 before 1 October — determination times have genuinely improved for applications entering the queue now.
- Coming off a fixed buy-to-let deal in the next year? Get a new rate modelled or booked well ahead of the renewal date — swap rates moved again this fortnight and lenders have already repriced.
- Relying on new-build completions to ease pressure on a local market? Recalibrate — starts are down over a third on the year, and that supply isn’t arriving on the old timetable.
Today’s notes are about the cost of building and lending catching up at once — the practice offers full building surveys across the South East for anyone weighing a development site, a refurbishment scheme or a buy-to-let purchase against numbers like these. Get in touch.
Small print. General commentary, not advice for your specific circumstances — regulations, schemes and deadlines change, and your property is not the average property. Sources linked were accurate when read on 12 September 2026.