Earlier this month, the government confirmed it was pushing ahead with the Future Homes Standard and launched a consultation on the uplift to energy regulations to improve the efficiency of new homes. David Blackman reports on what the changes mean for housebuilders and homeowners – and whether construction has the means to carry out the plans
Robert Jenrick’s warm words for this year’s Stirling Prize winner, a council housing scheme in Norwich built to the ultra-low emission Passivhaus standard, will have provoked hollow laughter among many in the eco-building community.
If the housing secretary’s own government hadn’t scrapped the Zero Carbon Homes standard in 2015, just a year before it was due to come into force, Goldsmith Street’s eco-credentials would be close to the norm by now rather than an exception. By 2016, under legislation introduced by the previous Labour government, all new homes were meant to be carbon neutral.
But the recently appointed Jenrick has at least tried to put right that controversial 2015 move. At the Conservative Party conference, earlier this month, he launched a wide-ranging shake-up of the Building Regulations. The Nottinghamshire MP confirmed that the Future Homes Standard, first announced by former chancellor Phillip Hammond in his swan song spring statement earlier this year, will go ahead in 2025, including controversial moves to ban fossil fuel heating from all new homes.
- Read: Government seeks views on sweeping energy regulation changes
- Read: Future Homes Standard consultation
The package also outlines changes to Parts F and L of the Building Regulations, which govern energy efficiency and ventilation, as well as moves to toughen up the regime for enforcing these rules.
Few had expected the Part F and L reviews to appear so soon. While former PM Theresa May pledged that the UK would halve its emissions from buildings by 2030, there had been few signs of activity. Since May’s speech last year though, the campaigners of Extinction Rebellion have helped to push the government to adopt a new target that the UK should be a so-called “net zero” emitter of greenhouse gases by 2050.
What this means in practice is that emissions must be so low that any remaining greenhouse gases which can’t be eradicated, such as those from air transport or energy intensive industries, must be counterbalanced by measures to suck carbon out of the atmosphere. “What Friends of the Earth and Greenpeace have been doing for 25 years, Extinction Rebellion have achieved in six months,” says David Adams, former chief executive of the Zero Carbon Hub, which was set up to spearhead the previous drive to cut emissions from the built environment. And in the meantime, the Labour Party has, somewhat controversially, recently committed to a net zero target of 2030.
From the government’s perspective, tougher building regulations are a relatively cheap way of cutting emissions, says Adams: “There’s no cost to the government from building regulations because it goes onto the builders.”
But nothing really comes for free in this world.
So what will the new draft regulations mean for housing developers? Will they drive up costs and cut supply? And is the construction industry’s beleaguered supply chain in a fit state to deliver the government’s revived green building dream?
Chris Brown, chief executive of development manager Igloo, gave a withering response to Jenrick’s announcement on Twitter, writing that it is “going in the right direction, but too late and too slowly”.
“We’re in an emergency so we could do it quicker than that,” he said, referring to the 2025 target for to adopting the new Future Homes Standard. But Adams is pleased that the MHCLG (Ministry of Housing, Communities and Local Government) has heeded the advice of the Committee on Climate Change by sticking to its guns on the 2025 new build gas boiler ban, which the advisory body first recommended in a report published earlier this year. And it is technically feasible, given that equipment such as solar panels are available and increasingly affordable, he says. “It’s not going to be a massive leap, technology for 2025 already exists.”
But developers won’t be able to wait until the introduction of the Future Homes Standard in 2025 to make progress on energy efficiency. The consultation paper published at the beginning of the month moots two options for ramping up standards in Part L next year. The first proposes a 20% improvement in carbon dioxide emissions from current levels. This would be delivered predominantly through improvements in building fabric, such as triple glazing and waste water heat recovery systems, as well as higher standards to prevent heat loss from walls and floors.
The second option involves a combination of less demanding fabric standards, such as double glazing, alongside deployment of low-carbon heating and micro-generation devices, such as solar panels. This latter option, which is preferred by the government, would result in a 31% improvement in carbon emissions.
And while going down the so called “fabric first” route will save the typical household £59 a year on their energy bills, opting for the mixed approach will mean they are £257 a year better off. This may sound appealing, particularly for a government keen to sugar coat the drive to a green future by showing that it can deliver lower energy bills. But Joanna Wade, deputy chief executive of the Association of Decentralised Energy, believes it is a potentially short-sighted move. Allowing lower fabric standards now, she says, opens up the risk that homes developed over the next five years will have to be expensively retrofitted later when more demanding regulations are introduced later on.
Julian Brooks, network and programme manager at the Good Homes Alliance, agrees. “You are best to make the building as energy efficient as you can before stuffing renewables on: you don’t want to be retrofitting houses 20 years in the future.” And insisting on higher fabric standards doesn’t preclude low carbon heating and power, says Wade: “Ideally you would have both.”
In the longer term, the paper anticipates that heat pumps and heat networks (and to a lesser extent direct electric heating) will be the principal means of producing low-carbon heat when the now near ubiquitous gas boiler has been retired.
Although a well-established technology, electric heaters can be very expensive to run, and if deployed at scale will significantly increase demand on the already under-pressure National Grid. The paper sees a role for electric heaters where a home is built to the “very highest” fabric standards, thus lowering potential demand on the grid.
Gemma Stanley, policy analyst at the Solar Trade Association, says: “If developers want to use direct electrical heat, they will have to mitigate it with some form of low carbon generation like solar to make sure that cost to householders is not ridiculous.”
The government sees heat networks (where heating is piped into the home from a mini-power station located in the neighbourhood) as an “important part” of its low carbon heat plans, in particular in cities and high-density areas. This is partly because they can be adapted to low carbon technologies with little disruption to individual householders. And they provide a “unique opportunity” to exploit larger scale, renewable and recovered heat sources that can’t be accessed at an individual building level.
The government’s other preferred option is the air source heat pump. However, only around 20,000 are installed a year in the UK so far even though the technology has been in common use for more than a decade.
Who will do the work to embed low carbon heating into our homes?
The government hopes that its new regulations will spur a new mass market for low carbon heating. Even so a “major headache” is the availability of quality installers in the supply chain, not just for heat pumps but many of the items that the regulations point towards, says Adams: “The issue facing the industry is that we are going to have to build Passivhaus homes at scale and they can’t even build buildings compliant with [sustainable homes] Code 3 now. There needs to be a bit of realism about ramping up this stuff.”
Igloo’s Brown agrees, noting that it won’t be as easy as switching the existing army of gas engineers to become heat pump installers. “These are more like fridges,” he says.
Chris Twinn, formerly of Arup who has set up his own sustainability consultancy, is frustrated about the paper’s reliance on sophisticated kit, like the waste water heat recovery systems touted in the consultation document. High performance, low heat shower heads can deliver the same kind of carbon savings, he says: “We could go a lot further using cheaper alternatives.” The “default position” should be installing measures that require minimal management and maintenance, like windows that open rather than relying on mechanical air recovery systems that may not be replaceable in future years if they break down because the manufacturer has gone out of business.
This skills shortage extends to the monitoring process. In a bid to eradicate the so-called “performance gap”, which is the gap that too often exists between the carbon the building is meant to generate when designed and the level of emission once it is actually complete, the consultation paper proposes a tougher compliance regime with applicants having to test all completions, rather than a sample of a scheme, to ensure that they are airtight. This would include furnishing photographic evidence to show that homes have been built to the specified standard.
But while a good step, this more stringent regime won’t be worth the paper it is written on if the acute shortage of building control inspectors is not rectified, argues the Good Homes Alliance’s Brooks. “At the moment you have a lack of resources and all sorts of projects slipping through the system due to lack of inspectors. If they don’t do a recruitment drive around building control, there is going to be a market in dodgy photos,” he says, recalling the industry’s record of “sharp practice” in this area. And the temptation to cut corners will be all the greater given the additional costs, which the government admits the new higher standards will entail.
The overlap between building control and planning has been a key area of contention surrounding efforts to tackle energy efficiency over recent years.
One source is the current rules, under which the building regulations that apply to a development are those in place when the scheme it is given planning permission rather than when it is built.
The consultation paper published by the government proposes to end this situation.
“Developers won’t be able to register a site, put a red line on it and so abide by existing regulations for the next 30 years,” says Good Homes Alliance’s Brooks.
But alongside this move, the government is stopping local councils from setting energy efficiency standards that go beyond those set out in building regulations.
It justifies this move on the grounds that the application of disparate energy efficiency standards by different local authorities creates a ‘confusing’ picture with homes having to be built to different technical specifications across England.
This inconsistency creates in turn ‘inefficiencies’ in supply chains and means that planners have to take decisions about energy standards rather than building inspectors.
Anyway, says the government, the need for local authorities to seek higher standards may soon redundant when the combination of the Future Homes Standard and the decarbonisation of the electricity grid delivers the desired outcome of zero carbon dwellings.
Scott Crease, residential sector leader at engineers at engineers Max Fordham, wonders how innovative approaches to energy efficiency are going to be trialled and delivered in the future if this local discretion to set higher standards is taken away.
He says that local authorities have been at the “spearhead” of innovation on efforts to improve the energy efficiency of the built environment.
ADE’s Wade argues that the government’s justification for this move “doesn’t stack up”, particularly at a time when councils such as Reading, Manchester and the Greater London Authority are developing cutting edge approaches to the issue.
“There is no sense for a local authority to impose standards that are so difficult to meet that they won’t get housebuilding there. They have a natural incentive not to do something that is ridiculous.”
Brooks says: “If local authorities want to go further, they should be allowed to. If you have local authorities declaring a climate emergency and putting forward strategies to address it and they hamstrung by government legislation it doesn’t seem fair.”
The fabric first approach would add £2,557 to the build cost of the typical new home. This will translate into increased expenditure, based on present values, of £5.6bn for new housing, according to the housing ministry’s own impact assessment.
Meeting the 31% target would add £4,847 to the build cost of a new home. For flats, the additional build costs will be lower at £2,256 because of the smaller roof area that is available for solar panels, which remain the main form of electricity micro-generation. This equates to increased costs of £10.4bn, according to the housing ministry, which it says would be counterbalanced by £7.7bn worth of energy savings and £3.3bn worth of non-financial benefits, like carbon savings and air quality savings. Given the lack of lead-in time for the introduction of these changes, the impact assessment says it is “unlikely”’ that these additional costs will be factored into land purchases in the short run.
Industry bodies are keen to acknowledge the need to cut emissions but warn about the risks for supply. A spokesman for the Home Builders Federation says: “In the context of the climate change challenge we need to continue to be ambitious, but we must also ensure that requirements are practical and timeframes realistic and allow technologies to be properly developed and delivered by the supply chain and to achieve the new skills required.”
Brian Berry, chief executive of the Federation of Master Builders, says: “It is important for government to be mindful that build costs for SMEs tend to be 70% higher than for volume housebuilders. There is a cumulative impact of all new regulations being introduced for housebuilders over the coming years, such as new biodiversity regulations and electric car charge points. Each of these could add thousands of pounds to the cost of a project. The FMB is willing to work with the government over the coming months to ensure that these new regulations are actually deliverable for SME housebuilders.”
The government admits in its impact assessment that the new regulations would lead to increasing build costs. This could deter developers from building as many houses because the prices they paid for sites is based on the existing and less stringent regulations. This would then have a negative impact on net additional housing.
The housing ministry says that the “short-term impact” of the regulatory changes housing supply viability may be “slightly more” volatility, whilst expressing the confidence that costs can be absorbed by renegotiating planning consents or section 106 agreements.
Adams, who worked with Nottingham council on retrofitting some of its dwellings up to the Passivhaus standard, believes that social landlords will feel the pinch from the new regulations more than volume housebuilders. “They’re probably not going to be able to build the same number of homes.”
But Igloo’s Brown has little sympathy for the volume builders, given the lucrative sums they have awarded themselves in bonuses over the last few years: “I imagine the builders will complain like mad, but for most of the big builders, the amount of money invested is less than the bonuses they have been paying their executives.”
In a less rapidly warming world, he says the changes would ideally be phased in less rapidly: “Making the change is challenging,” he says, pointing to a 250-home development that Igloo is just about to go onsite with Nationwide, which is due to complete in 2020 near to Passivhaus standards. “We are building to those standards but for someone else letting the contract to a single builder, it would be a challenge because the regulations aren’t in, so it’s hard for a builder to price them in.”
However as big cities around the world, including London, recover their poise after the latest wave of Extinction Rebellion disruption, it looks like a challenge housing developers must increasingly get used to.