Unaffordable costs and delays damaging businesses and increasingly leaving residents paying twice for services to maintain new estate roads

The Home Builders Federation’s (HBF) latest Freedom of Information (FOI) exercise of highways authorities has found that highway bonds – the financial guarantee local councils demand of developers to ensure the road is built to the agreed standards - have increased by up to 1,000% over the last seven years. Meanwhile, the time taken to approve road designs has shot up from two weeks to two years.

The report, ‘Slow Lane to Adoption,’ examines the latest findings of HBF’s annual FOI exercise, shining a light on the inconsistent demands of different Local Authorities and rocketing costs and timescales to get roads adopted.

With no consistency between local authorities and little overarching guidance for highways authorities as to what constitutes adoptable standards, many new roads remain unadopted. As a result, private management companies are more frequently used, leaving residents paying additional estate management fees and service charges with no discount to council tax – therefore effectively paying double for the same service.

The report finds:

• For the 2022-2023 financial year, the average cost per bond ranged from £3,619 to £3.6 million. When HBF first ran the FOI in 2017, the average cost per bond ranged from £515 to £321,421.
• The cost per bond has increased by over 700%, while the highest value has increased by over 1,000%. Not only is this a significant variance, it is also a huge increase from previous years.
• This fee is calculated using a percentage of the bond value but this percentage can vary greatly from 3% in one council to 20% in others.
• For Section 278 agreements which relate to alterations to existing highways, the time taken from technical submission to technical approval ranged from two weeks to 103 weeks.
• For Section 38 agreements, which relate to the construction of new highways, the time taken from technical submission to technical approval ranged from two weeks to 103 weeks, and to formal adoption ranged from four weeks to 286 weeks.

The risks, costs and delays associated with a lack of road adoption also has a significant impact on SME home builders. The conflicting approaches used by highways authorities, the lack of standard timescales and the increasing costs make it near impossible for businesses to plan and deliver housing.

For the last decade, HBF has been imploring policy makers to pay sufficient attention to the process for the adoption of roads. HBF is calling on Government to oversee mandatory adoption to all statutory highways authorities in England and Wales under a transfer of assets and consider a reduction in council tax for residents of households on new estates with unadopted roads and amenities.

The issues associated with highway adoption were also highlighted in the Competition and Markets Authority recent Housebuilding market study as an area of concern and recommended, among other things:

• That the UK, Scottish, and Welsh governments each implement common adoptable standards for public amenities on new housing estates.
• That the UK, Scottish, and Welsh governments each implement mandatory adoption of public amenities on new housing estates.

Neil Jefferson, Chief Executive Officer of the Home Builders Federation says: “For many years, our research has highlighted the problems that exist in getting highways adopted. In most cases, roads are being built to common adoptable standards and yet they remain unadopted by local authorities.

“We support the CMA’s recommendations to introduce common adoptable standards and mandatory adoption by public authorities. Without government intervention to establish a consistent national approach and mandate adoption, home builders and homeowners will continue to face the consequences, resulting in avoidable costs, delays and risks to business.”