The axing of the zero-carbon housing legislation yesterday put an end to a decade of efforts to define a standard for new homes that would support the UK’s drive to reduce emissions from new housing. It was contained in a document from the Treasury, apparently now setting more UK housing policy than DCLG, entitled ‘Fixing the foundations – Creating a more Prosperous Nation’
There is much to welcome in the document, and a lot that seems eminently sensible, I say this to deflect any criticism that I am singling out a single issue to the exclusion of the rest, all 88 pages of it. But it seems to me to be entirely wrong-headed to drop this proposal now, after planning for it for such a long time, and after so much work has been done to prepare for it. I have seen no justification for the decision yet, and I await that justification with interest. The document is about planning to improve the UK’s productivity, so the assumption must be that dropping these proposals will improve productivity in the UK housing industry.
Whether this is really the case or not depends how you measure productivity.
Will removing this requirement mean that more houses get built than would otherwise be the case?
Probably not, as housing starts have more to do with sales values than build costs. The introduction of previous regulatory changes have not had any visible effect on housebuilding numbers as DCLG usually has a fairly relaxed transition period allowing housebuilders to prepare for the new standards over a long period. Housebuilders are also very skilled at passing on the costs of improved performance to their supply chain.
Will more plots receive permission with the legislation removed?
Probably not, as planning authorities will want to see evidence that new homes are sustainably developed and this would have been one way of demonstrating this.
What we will see is that the costs of occupying new homes will stay higher than it would otherwise be, as will the CO2 emissions from them. This could affect up to a million new homes if housing numbers improve towards the 200k per annum mark and this situation lasts for five years 2016-2021. (see graphic)
The additional running costs will be in the region of £200 per annum per household, meaning a spend of £200M on energy by consumers that could be avoided and the additional CO2 will be around 2 tonnes per dwelling, reaching a total of 2 Million tonnes of additional CO2 emissions that could otherwise be avoided.
To meet our CO2 budgets this extra 2Mt of CO2 will need to be abated elsewhere, which will come with a cost, and our energy system will need to be developed to include the additional energy supply needed.
It makes little sense to me that a nation that prides itself on its universities and innovation, and associates both of these with improving productivity, would make this decision. Housing manufacturing in particular is a very innovative and productive industry, and can meet these higher standards already, but needs a willing market to thrive. The companies that will benefit from this are the ones looking backwards, the brick manufacturers, the housebuilders, the landowners. The ones that will suffer are the ones looking forward, the innovative manufacturers, the developers of high quality homes, the purchasers and occupiers of the homes themselves. This change in direction simply retains the status quo and extends the period within which housing can continue to be built using traditional and low productivity methods, and removes any regulatory driver for the industry to improve and innovate.
By 2020 the UK is expected to have introduced legislation to deliver Nearly Zero Energy Buildings (NZEB’s) together with all other EU partners. The proposed 2016 regulations would have been a strong stepping stone to this higher standard and made for an easy transition. The Chancellor appears to be betting on that standard either going away, or being optional for the UK to adopt come 2020.