The planned review of housing regulations announced last week in Inside Housing and in the Guardian raises a number of interesting questions. The main question is: who is this meant to serve? My short answer is that it serves political ends and no one else’s. It could end up having a positive impact on the housing industry in about five years time, but this is not the time to introduce uncertainty into the market. See below for the longer answer.
This certainly clears up the confusion about Andrew Stunells removal as the minister responsible for Building Regulations. He was determined to bring forward a tightening of the regulations, not a relaxation.
The announcement indicated that the review is intended to improve the viability of housing projects particularly where local authorities had loaded on additional standards to development. The typical examples given are sustainability standards such as BREEAM and Code for Sustainable Homes. Now as a sustainability consultant I am unlikely to support this, but I am also pragmatic and I would rather see homes being built than not being built.
House builders would benefit from a relaxation of standards in the short term, because it would reduce their development costs, but only on sites where they have bought the land in the expectation of meeting those higher standards and they will have already passed on the higher costs to the landowner in a lower price for the land. For future sites they will simply pay the landowner a higher price for the land. Barratt have published figures showing that Code 3 costs them so little extra that it is no longer a factor for them. Code 4 is still more expensive.
But I would predict that some of these savings will be taken up by housebuilders having to redesign their standard house types to meet the new regulations, introducing a new level of unpredictability into the system at a time when there doesn’t appear to be much to be gained from it. Steve Stone of Crest has gone on record saying that the industry doesn’t need it.
Customers may benefit from changes if the changes are designed with them in mind, and that certainly would be a change for the better. But building regulations is aimed much more at protecting the interests of insurers and mortgage lenders than the interests of customers, and I don’t anticipate this being any different. Government led initiatives tend not to be capable of taking individual choices into account.
The supply chain needs regulatory change like a hole in the head, their margins are already eroded and the last thing that they will want is another opportunity to have their agreements with house builders renegotiated.
Landowners will not want a review of standards except in specific areas where local standards are making their land unviable. The land will be unviable because house builders who build to higher standards cannot charge a premium for the houses that they build compared with existing homes. This is not a reason to drop standards, it is a reason to work with the Council of Mortgage Lenders so that customers can buy the house they want and pay a realistic price for it. When Toyota sells a Prius, it’s price isn’t determined by the price of the other cars recently sold in that area.
Local authorities will be very confused indeed by the language of this announcement. Localism is all about setting local standards for development to ensure that local requirements are being met, so if one authority sets Code Level 6 as a requirement to ensure very sustainable and expensive housing is built in its catchment who is the government to argue with it? Conversely if an authority wants to encourage house building in its catchment and sets a standard at Code 3 again why would the Government disagree?
There are many potential benefits for designers of housing, but something tells me that this won’t be the top of the list of priorities. Throwing the standards in the air means that there will be a need for skilled designers to interpret the new thinking and to produce new standard ranges and to provide guidance. Currently new housing has so many standards that design has become a task of ensuring that a design doesn’t break any rules rather than being excellent housing. But a hiatus in new sites because of developer uncertainty is the last thing designers need at this point.