Communities are waiting years for new roads to be adopted by local authorities, with some councils taking up to 12 years to take responsibility for roads serving new housing developments, despite them specifying the exact design of the roads, charging to inspect them and requiring residents to pay full council tax in the meantime.
Meanwhile, the average highway bond, the financial guarantee required by councils to be paid by house builders to ensure new roads are built to the required standard, has risen almost 170% since 2018, according to new research from the Home Builders Federation.
The consequences extend to homeowners. Where roads and other estate amenities remain unadopted, home builders are left with no option but to bring in private management companies to take on responsibility for maintaining roads, open spaces, drainage, lighting and other shared infrastructure. Residents can therefore face additional estate management charges on top of council tax, which should, in theory, cover such costs.
The findings, from a Freedom of Information (FOI) exercise of local highway authorities, highlight the inconsistent and increasingly costly system facing home builders once planning permission has been secured. Different local authorities apply different standards, fees, bond requirements and timescales, making it harder to predict both the cost of delivering new roads and the impact it will have on the viability of bringing new homes forward.
The research finds:
- Section 38 agreements, which are signed post planning agreement and after signing off on the technical specification of the road before construction work starts on new housing estate roads took just over four years on average from submission to adoption, with some taking up to 12 years
- Section 278 agreements, which are signed to allow developers to make changes to existing roads, can take up to a year to be approved, with a further two years from approval to completion.
- The average highway bond has risen from around £125,000 in 2018 to £338,000 in 2025/26, with individual bonds ranging from £15,400 to £1.4 million.
- Highway bonds averaged more than £7,000 per home, ranging from £110 to £20,000 per home between authorities.
- Inspection fees, the amount charged by the local authority to inspect the road prior to agreeing to adopt it, ranged from approximately 3% to 20% of the bond value.
The lack of consistency makes it difficult for home builders to establish the true cost and timing of a development when assessing whether a site is viable. This is particularly challenging for small and medium-sized (SME) builders with less capacity to absorb unexpected costs and delays.
Over recent years, the huge increases in taxes on house building and the cost of delivering the numerous policy requirements layered on by successive Governments have added on average £76k to the cost of delivering every new home. This has led to sites across swathes of the country that would previously have been developed for new housing to become unviable for development.
Significant sums of capital can remain tied up in highway bonds while home builders wait for agreements to be approved or roads to be adopted. Prolonged delays can also increase financing and construction costs and delay the point at which completed homes can be occupied.
The inconsistencies between adopting authorities and the guidance were highlighted in the Competition and Markets Authority’s (CMA)2023 Housebuilding Market Study, which called for common adoptable standards and mandatory adoption of public amenities on new housing estates.
HBF supports the CMA’s recommendations and is urging Government to establish a consistent national approach to highway adoption, including common adoptable standards, nationally consistent bond and inspection fee requirements, statutory timescales for Section 278 and Section 38 agreements, and clear national standards for commuted sums.
HBF is also calling for greater resources for local highway authority teams and for Government to oversee the mandatory adoption of existing unadopted highways by statutory highway authorities in England and Wales through a transfer-of-assets mechanism. As well as a reduction in council tax for residents living on new estates with unadopted roads and amenities, to help address the unfairness of households effectively paying twice for services while providing an incentive for authorities to secure timely adoption.
Neil Jefferson, Chief Executive at the Home Builders Federation, said: “The Government’s ambition to increase housing supply relies heavily on private home builders to deliver, but central and local government needs to work with industry to ensure sites are viable if they want to see more homes getting built.
“Planning reform is an important first step, but if sites then face soaring highway costs, unpredictable requirements and years-long delays, their viability can quickly be undermined. It also increases costs for homeowners who have to pay management companies to maintain their roads, alongside full council tax that would ordinarily cover those costs.
“Government must address these wider barriers to delivery and create a consistent, transparent highway adoption process, so that planning permissions can translate into the homes the country needs.”
