The £2bn cladding tax confirmed in the budget yesterday and other costs could combine to stifle investment in new homes, the Home Builders Federation has warned.

The HBF, reacting to news that the cladding tax will be set at 4% on profits above £25million, voiced concern over a range of increased costs coming down the line for the housebuilding sector.

A spokesperson for the HBF said: “This new tax should be seen in the context of a raft of other new levies, taxes and regulatory costs on home building that various Whitehall departments are introducing, the cumulative impact of which could threaten site viability and stifle investment in new developments and employment.”