New research by the Home Builders Federation reveals developers have paid almost £2.3bn to water companies since 2020 to support infrastructure enhancements but planning permission is still being refused or delayed over sewerage capacity issues.

Some plans are being delayed even where water companies have not raised objections.

National planning policy dictates that responsibility for wastewater infrastructure lies with water and sewerage undertakers, not individual planning applicants.

A growing number of councils are refusing to grant permission or discharge planning conditions due to perceived uncertainty over sewerage provision.

The disconnect is creating serious delays across the housing sector, particularly for smaller developers.

Since March 2025, average wastewater charges for developers have risen by 52% despite house builders having already paid nearly £2.3bn to the water sector between 2020/21 and 2024/25.

Some of the companies receiving the most in developer contributions are also those raising the most concerns. Thames Water has received over £440m in combined payments and assets in five years but has objected to numerous housing applications across London and the South East.

Meanwhile, Anglian Water, which received around £330 million over the same period, is also linked to significant delays across its region.

HBF is calling on the Government to reaffirm existing planning policy, remind councils of water companies’ statutory responsibilities, and ensure housing targets are properly reflected in long-term water resource management and wastewater infrastructure plans.

David O’Leary, Executive Director at the Home Builders Federation, said: “These delays are yet another example of how misalignment between planning authorities, utility companies, and national policy is choking off housing supply.

“Water companies are legally responsible for ensuring network capacity and have received £2.3 billion from developers over the past five years to do so. Yet in the absence of clear national direction, planning permissions are being blocked, tens of thousands of homes delayed, and billions of pounds of community investment withheld.

“With each passing month, the government’s ambitious housing supply targets are slipping further out of reach as public bodies and utility companies impose new barriers to deliver.”