The implications of Net Zero by 2050 target on housebuilding in the UK

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The implications of Net Zero by 2050 target on housebuilding in the UK

Published 12 December 2019

The Climate Change Act 2008, as amended in June 2019, stipulates that the UK must cut its carbon and greenhouse gas emissions by 100% by 2050.

This target and the transition into a low carbon economy will have a significant impact on business and our daily lives. About half of our carbon emissions are related to how and where we build our homes, and about 27% is related to how we heat our homes.

The government has launched a consultation, open until January 2020, on stronger building regulations that will pave the way for the Future Homes Standard, detailed in their publication of 1 October 2019. The consultation seeks to amend building regulations by introducing higher fabric standards in new build homes. This will mean that every new home under this standard should typically have triple glazing and higher standards for walls, floors and roofs that significantly limit any heating loss. The consultation suggests that new technologies such as air source heat pumps and the latest generation of solar panels could be used by developers to improve the energy efficiency of new build homes. The consultation also suggests that by 2025 gas in new build homes should be outlawed.

The cost of building homes to this standard will, inevitably, be higher. The consultation does not address how the cost of building to higher fabric standards will be covered. Developers will now have to consider this standard (if introduced) as a cost factor when acquiring development sites alongside other planning considerations such as affordable housing. The cost of new build properties are already sold at a premium and in the current housing market this standard may be a deterrent for development on sites with narrower profit margins. Lord Deben, Chair of the UK's Independent Committee on Climate Change recently suggested at a talk that as build costs increase to meet higher energy efficiency standards this cost could be offset from the cost of development land as this cost is factored into profit margins. This is normally the case for build costs and it may delay sites coming forward.

Owners of new build homes should benefit from having homes built to higher fabric standards, including saving significant amounts on their annual energy bills. Furthermore, organisations such as the UK Green Building Council have suggested that energy efficient home owners should pay less council tax, and that homes which are less energy efficient should pay more. This may frustrate those who currently live in character homes which are not as energy efficient as their newer counterparts, especially as the cost of retrofitting homes with triple glazing and improved insulation could be thousands of pounds. This is particularly relevant to listed properties with stringent planning requirements. Some have argued that if Council Tax or Business Rates are going to factor-in energy efficiency then any increase in tax revenue should be made available to subsidise those seeking to retrofit their homes to improve energy efficiency.

How we navigate our way to the net zero target by 2050 will continue to be a consideration for the industry, particularly as many Councils declare climate emergencies. It is also likely policies will be introduced in local plans to support the net zero target and this will be a key consideration in any planning consent. If you would like to discuss the implications of the changes required as a result of the net zero target please contact us.

“The UK has set in law a target to bring all its greenhouse gas emissions to net zero by 2050 – one of the most ambitious targets in the world. Homes – both new and existing – account for 20% of emissions. Despite progress reducing emissions from homes, we need to go much further. New homes being built now and in the next 5-10 years will still exist in 2050 and therefore we must ensure that the energy efficiency standards we set for them put us on track to meet the 2050 target.”

The Future Homes Standard, 2019

Authors

Ben Sasson

Ben Sasson

London - Walbrook

+44(0)20 7894 6696

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