Developers are facing construction delays of more than 18 months and additional costs of up to £49,000 per week due to safety regulations such as the Building Safety Act (BSA), according to new data from the Purposeful Finance Commission (PFC).
A report published today by the PFC highlights how the BSA has unintentionally caused significant setbacks in the construction sector. The independent body, which brings together public and private sector organisations, warns that the stringent regulatory process is creating major barriers to housing and infrastructure development.
The report, Breaking the Cycle: Unlocking Infrastructure Investment, reveals that developers are waiting over 18 months for approvals from the Building Safety Regulator (BSR) before they can even begin construction. These delays stem primarily from the three-stage ‘gateway’ process that high-risk projects must navigate to secure planning consent, construction approval, and ultimately, occupancy.
Since the introduction of Gateway 2 in October 2023, the number of build-to-rent (BTR) homes reaching the detailed planning application stage has dropped by 41%, falling to just 17,315 between Q4 2023 and Q4 2024. The PFC argues that these regulatory delays are making many schemes financially unviable, with one developer reportedly losing up to £49,000 per week due to prolonged waiting times at Gateway 2.
In December alone, the BSR received 1,502 planning applications for high-risk buildings, yet nearly half remain undecided. Of those reviewed, more than 70% have been either rejected or deemed invalid. Meanwhile, construction starts on over 800 high-rise residential projects have been delayed, with Gateway 2 approvals now taking an average of 22 weeks—almost double the original 12-week target.
Tracy Blackwell, chief executive of the Pension Insurance Corporation and chair of the PFC, acknowledged the importance of regulatory oversight but criticised the lack of resources that is slowing progress. She said “regulators play a critical role, particularly in ensuring resident safety, but there is no excuse for them to be under-resourced and effectively stalling vital infrastructure and housing projects. The regulatory burden is strangling growth, and I’m delighted the PFC is focused on how regulation can better align with the government’s growth mission and drive investment into the economy.”
The report also found that nearly half (49%) of local authorities in England have reduced spending on planning, with overall planning department budgets increasing by just 3.85% per capita between 2018 and 2022.
What’s causing the delays?
According to the Building Safety Regulator staffing issues and process inefficiencies are at fault. The BSR has since targeted recruiting additional personnel, streamlining processes, and dedicating a team to small-scale applications made by residents.
In addition, the BSR is enhancing its multidisciplinary teams, which consist of Registered Building Inspectors, Fire and Rescue Service personnel, and other specialists.
Higher-risk buildings include those with at least seven storeys or 18 metres in height and containing two or more residential units. It also extends to hospitals and care homes.
Manchester to build tallest tower outside of London
Robert De Niro is backing the construction of the UK’s largest skyscraper outside London, plans for which were approved this week by Manchester city council.
Nobu Manchester, a 76-storey tower that will stand 807ft tall and house a 160-bedroom hotel, a restaurant and 452 homes, will be built in Deansgate, the thriving mile-long road that runs through Manchester city centre.
The scheme marks a first foray into the UK's luxury real estate market by Nobu Hospitality, an American firm founded in 1994 by the Japanese restaurateur Nobu Matsuhisa, Hollywood legend De Niro, and Meir Teper, an American film producer and businessman.
The skyscraper, part of the second phase of a larger scheme known as Viadux 2, will also include the construction of a smaller, 23-storey building.
The scheme was submitted by Salboy Group, a nationwide property development and funding company, in partnership with Nobu Hospitality.
It is expected to cost £360 million.
'Viadux promises to deliver a neighbourhood of high-quality design-led homes that meet Manchester’s substantial need for accommodation at a range of price points and tenure types while bringing to the Manchester cityscape a truly crowning feature, we are delighted with the council’s decision to approve our plans to complete the Viadux masterplan, " said Simon Ismail, managing director of Salboy.
Nobu has 12 residences around the world including in the United States, Abu Dhabi, Egypt, and Brazil.
The first Nobu Hotel opened in Las Vegas in 2013.
The second building will be constructed on Great Bridgewater Street with the ambition of creating 133 new 'affordable' apartments.
"Manchester is a vibrant, world-class city, and we’re proud to be part of a project that will bring the Nobu experience to this destination through a truly exceptional mixed-use project," said Trevor Horwell, CEO of Nobu Hospitality.
Alongside our signature Nobu Hotel and Restaurant, the Nobu Residences will offer a unique opportunity to live the Nobu lifestyle. It represents the kind of visionary development we seek - integrated, design-led, and rooted in cultural and community connection.
Viadux’s first phase, comprising a 40-storey tower known as Viadux, was completed early last year.
It included 370 apartments, all of which sold.