2014 Part L Transitional Arrangements – Bad for Purchaser and Industry

The announcement from DCLG on the transitional arrangements will surprise no one. As has become usual in the UK, a developer can register a site against the current regulations (2010) before the date the new regulations come into force (6th April 2014) and provided that the developer can ‘start work’ on site within twelve months, that entire site can be developed to 2010 regulations. Even if that site is for 10, 100, or 1000 homes. The only evidence that the purchaser will have is that their EPC will show a lower figure than a comparable home, but since this has no impact on the value of the home, the seller is better off, and the purchaser is worse off, but none the wiser.

I struggle to think of a comparable situation in other industries. Where else, other than in the housing industry, can you buy a ‘new’ product that is designed and built to standards that are out of date? In the clearance section of the supermarket, where you find goods dangerously near their sell-by date? In many other industries and sectors the implementation of new legislation will have an impact that needs to be thought through and change implemented in a logical way, and there is some logic to the DCLG transitional arrangements. But not much.

The reasoning behind transitional arrangements is that developers need certainty of their costs before they buy land in order to develop. Enforcing new regulations after they have started developing houses on a site would mean changes in specification and design, which would add costs to the development and lower profits. On the face of it that sounds reasonable. But what is the reality of the situation.

Regulations are never sprung on the industry, there are years of warning in place about up coming regulations, and developers are smart enough to build those additional costs into their development plans.

House prices are rising on average, even after inflation, so any increases in costs are likely to be absorbed by the developer charging a higher price in any case.

Where regulations are enforced, they rarely mean a change in design, instead they can usually be managed with a change in specification. The type of insulation used in the cavity can be changed, or the windows can be upgraded slightly. In many cases this has little or no effect on the final cost to the housebuilder as they have such a strong grip of their supply chain costs.

In the end, all this does is to damage the reputation of the industry and a more sensible approach needs to be taken. Home purchasers should not find themselves in a situation where buying a home on one plot gives them a house built to 2006 regulations, and buying a home on another plot nearby gets them one built to 2010 regulations, and there is no price difference!

The occupants of one home will surely visit the occupant of the other home at some point and wonder at the difference in specification and heating costs. They will find it difficult to understand that their home, although completed at the same time and apparently built to the UK Regulations, will have markedly different performance. If you add in the potential for a performance gap on top of this, and there is a lot of risk to the industry reputation.

The last time there was a change in the regulations, 174,800 plots were pre-registered with and that was in half the local authorities across the UK. This is not an unusual situation in the industry, at 125,ooo completions a year, it is more likely to be normal.

What seems particularly strange to me is that the regulatory bodies actively encourage this, LABC currently has a page encouraging builders to ‘beat the deadline’, because they are good Building Control Body and ‘know their stuff’. Is this how a regulatory body ought to behave, encouraging the avoidance of responsibility to the consumer while meeting the regulations? I understand it, but I cannot find anything to admire in it.

The construction of new housing is a very positive thing, it creates much-needed new homes and provides enormous benefits to society, but building what are clearly sub-standard homes in a market where developer profits have rarely been higher is a step too far, purchasers deserve better.

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One thought on “2014 Part L Transitional Arrangements – Bad for Purchaser and Industry

  1. I think it could go a little wider this time around. If (and it is still an if at this point) at the same time, Government goes forward with the proposals in the Housing Standards Review, we may have a situation where things are actually going even further backwards.

    For example London, currently generally requiring Code Level 4. If, central Government prevents Local Authorities from requiring additional standards in Energy – the requirements in London will get considerable worse (around 25% worse if developments are built to 2010 Part L).

    This seams like the wrong direction if 2016 Zero Carbon is still a target.

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