The government’s aim to make housing greener is laudable, but imposing ever more stringent regulations won’t help. Linden Homes’ idea of a central fund for retrofitting may do
All new homes built in the UK must meet stringent government energy and water efficiency standards. But over the next five years these guidelines are set to be made even stricter - with a potentially catastrophic effect on housing supply.
Building Regulations are presently upgraded on a three-year cycle. Currently, housebuilders are working under 2010 regulations, which are due to be upgraded in 2013. Under these existing plans, by 2016 all new homes will have to be zero carbon and have low water consumption in use. The increase in current costs to achieve the 2016 standards will be between £20,000 and £30,000 per unit.
Simply adding £20,000-£30,000 to the price tag of new homes is impractical, as lenders will fail to recognise a commensurate uplift in property values. Deducting the cost from the land value is also a non-starter as it will result in a much greater number of sites having no residual land value, particularly in the less affluent North The knock-on effect will be fewer development opportunities coming to market and ultimately lower housing delivery including, of course, of affordable homes.
But there is another way. Linden Homes believes retrofitting the nation’s existing housing stock is a far better way to achieve sustainability targets than imposing additional regulation - and ultimately significant and disproportionate additional costs.
It is relatively easy to improve the energy and water efficiency of housing stock built before 2000, and the improvement in efficiency would be more than double that achieved from new homes, which are already very efficient.
Retrofitting would deliver significant energy and water savings, reduce utility bills, create jobs, invest in communities and cut maintenance costs
These improvements would have wide-reaching benefits. Not only would they deliver significant energy and water savings, but they would reduce household utility bills for those most affected by fuel poverty. Also, they would create jobs for local tradespeople required to carry out the works; make a real investment into local communities; and reduce the burden of maintenance costs to housing associations and local authorities.
In turn, there would be a significant stabilisation of costs to the new-build sector, which would make land development more viable and enable more new homes to be built, benefiting new homebuyers.
By moving the emphasis from continued carbon dioxide and water consumption reductions on new-build construction to improving the existing housing stock, we can deliver much better value for money for the nation as a whole. This could vastly improve the energy and water efficiency of about 30,000 existing homes each year and deliver the same energy and water efficiency savings as intended by the proposed 2016 Building Regulations improvements, but at a fraction of the cost.
Linden Homes has met politicians from all three parties to urge the government to rethink its sustainable housing policy and has been encouraged by the level of support for the scheme. We are now seeking further backing from the industry.
If implemented, the scheme would see new homes continue to be constructed in accordance with current Building Regulations beyond 2013, but developers would pay a “new homes sustainability bonus” from this date. This money would be deposited into a central fund to be used to retrofit the UK’s existing housing stock, primarily in partnership with registered social landlords.
Fundamentally, this is a time when budgets have been tightened and fuel bills are rising and we believe housing associations, registered social landlords and local authorities need help to fund energy improvements to existing homes. Our proposed scheme makes this possible, while simultaneously providing benefits to the new homebuilding industry.
Ian Baker is group managing director of Linden Homes