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The tide turns
Housebuilder – February 2007

Mark Smulian looks at the impact on the industry of the Code for Sustainable Homes

There was a time when environmental issues were the concern only of activists who, having re-used their bathwater, cycled about buying lentils.

It has taken the environment about 30 years to move from a fringe issue to the heart of government policymaking. But arrive it has, with a deluge of initiatives just before Christmas as communities and local government secretary Ruth Kelly launched policies that seek to make new homes carbon neutral. Housebuilders would once have reacted with outrage to such perceived government meddling in their business.

But the Home Builders Federation has decided to work with the government, reasoning that it can influence this process but not halt it. Politics has taken over. The public is now sufficiently alarmed by the implications of climate change that the government - and the opposition parties - are facing a clamour for action from voters. Seeing that, ministers can and will act, and any industry that sought to downplay climate change would risk being on the wrong end of public opinion.

As the old saying goes "if you can't beat 'em, join 'em," and HBF executive chairman Stewart Baseley shared a platform with Kelly at the launch of the programme to create zero carbon homes within ten years. But there will be costs to achieving this, both in equipment such as solar panels and improved insulation, and the time taken for planners and regulatory bodies to agree that a home meets requirements.

There is also a home buying public to educate. People may be worried about climate change, but few are prepared to pay to prevent it. This is why government regulation will be important to the industry. Were it left to the market, builders who spent extra to provide "green" homes would lose out to those with a cheaper product who did not. Regulation means that all builders must meet the same standards, so that none can be undercut by an environmentally unfriendly rival. That makes the content of regulations crucial, so that the playing field is not merely level but one that housebuilders are happy to play on.

Hence the HBF's efforts to work with the government. Its head of external affairs, John Slaughter, explains that regulation is needed both to level the playing field and to encourage the supply chain. If suppliers are assured that regulation means they will have a steady market, they can invest with confidence in mass production of environmental products.

He says: "This is an idea whose time has come. It is recognised that there is a practical and political necessity to avoid quite severe consequences and we need to take decisive action over ten to 15 years. If we are engaged with the government we can use our influence to make for a better programme."

Slaughter says this will not be a burden on the industry because regulation will put all builders on the same footing. "Ten years gives us time to plan ahead rather than be caught out by anything,"he says. "We will know our way through the standards by then, which we hope will be drawn up in a pragmatic way to foster innovation."

One concern for builders might be that planners have welcomed the government's initiatives with great enthusiasm. They see themselves as being at the forefront of enforcing climate change policy. Will this lead to even longer delays, or onerous conditions, as applications are argued over?

Slaughter points out that the draft planning policy statement on climate change "goes quite a long way to say this should be done through the Building Regulations not the planning system." The advantage to builders is that the regulations are a single national system that cannot be changed by the whim of planners or councillors.

local authorities

"The draft PPS says local authorities should facilitate renewable energy and not devise policies that duplicate the regulations," adds Slaughter. But planners see it differently.

The Royal Town Planning Institute has congratulated Kelly for using the code for sustainable homes to "force housebuilders to meet challenging targets [and giving] planners clear government policy to reduce carbon levels through intelligent and sustainable urban design."

RTPI president Clive Harridge says: "At last the government is getting real about sustainable development; planning is a key tool in tackling climate change." The Planning Officers Society, which represents council planners, is similarly enthusiastic, and contends that planning and Building Regulations have "complementary, not competing, roles in the achievement of low carbon developments."

It has also spotted that the government has allowed "some latitude to local authorities to set higher standards through detailed development plans where there is local justification or opportunity, particularly in respect of major developments."

Planners could use this power to encourage housebuilders "to design in a way that addresses not just energy conservation and carbon emissions, but also ventilation, drinking water conservation, the control of surface water, biodiversity, waste management and sustainable transport," it has noted.

If that sounds like a call to environmental activism by planners when they consider housing applications, it probably is, and it is not yet clear where the balance will fall between them and the Building Regulations.

Linden Homes Western md, Toby Ballard, foresees conflicts between regulations and planners' demands. "In the south east they have had local authorities demand 10% renewable energy and have had to accommodate it. "Something like that is best dealt with through the Building Regulations, but they can look at things differently from the way planners do. For example, the regulations might specify use of renewable energy, but solar panels are bloody ugly and planners might object to the look of them."

Slaughter admits he has heard a variety of opinions at HBF meetings and says: "Not everyone is 100% convinced, but we are ready to engage with this agenda. It is not going to go away, and even under a different government there would be no significant change. The key thing is to be sensible in our approach and try to influence ministers."

Eco policies in the pipeline

Chancellor Gordon Brown has stated that all new homes must be carbon neutral within ten years and has exempted homes judged carbon neutral from stamp duty for an unspecified period. Building Regulations are to be progressively tightened to 2016 to increase the energy efficiency of new homes.

The code for sustainable homes, which gives a star rating from one up to six for new homes, comes into force on a voluntary basis from April 2007, and assessments are expected to become mandatory from April 2008.

The draft planning policy statement on climate change - which is a supplement to the existing PPS1 on delivering sustainable development - says council planning strategies should seek lower carbon emissions from developments and maximise opportunities for renewable energy supplies.

Consultation is currently being undertaken on a water performance standard and on whether the Building Regulations should be used for this.

Counting the cost

Builders who face higher costs for environmental measures can to some extent factor these in to land price negotiations. But cost remains an issue. Toby Ballard, md of Linden Homes Western, based in Bristol, says: "We bought a site from the local authority in Chippenham, where we are building to the Ecohomes excellent standard.

"The council would only sell the site for an Ecohomes project. If we had had to bid for the land against other builders I'm not sure we would have done it, because even if the extra cost is, say, 3,000 per home, that is a lot of money across 250 homes. Ultimately there is tough competition in the market to buy sites, and you cannot take on extra costs."

land prices

John Elliott, chief executive of Millwood Designer Homes, which builds 100 homes a year in Kent and Sussex and recently took the decision to offset all of its business-related carbon emissions, says: "The problem is that we factor in costs for environmental measures to the prices we pay for land, and if the planning gain supplement comes in as well, it could dry up the land supply and then the spiral of price increases starts again."

Neither believes there is much public demand for green homes. Says Elliott: "The public do not seem to be particularly concerned about these issues, although that may be changing with all the attention given by the media. "In my experience, if you tell people you are selling them an energy efficient house they are pleased, but if you ask them would they pay more the answer is 'no.'" Ballard observes: "If two houses were the same price and one had eco friendly features and the other did not, then buyers would choose the first one, but I'm not sure they would pay even 5,000 extra."