Sustainability within the UK Housing Sector

In 2006 the then UK government set a particularly noble benefit for the housing sector, that all new build homes by the year 2016 would be carbon neutral. In 2018, some three years since the target was subtly dropped by the Treasury importantly not the Communities and Local Government, two years since the target was meant to be met, the UK housing industry is struggling to comprehend, let alone meet the target. The target is needed, currently the range of the estimations within the market, housing accounts for between 30-40% of the UK’s total energy usage, 27% of the UK’s CO2 omissions and 24% of greenhouse gas emissions. There is clearly a need given the wider ecological context of the space in which we all inhabit.

Not only, is the sustainability target been subtly dropped, the sustainability of the industry to which all people interact, has been an exemplar of poor public policy, on both sides of the house. There has not been the implementation of the 2008 Planning and Energy Act that allow for focus for on sustainability and proper energy use. Not only this, but the only direction for the industry on this matter comes from ministerial statements rather than an act or an amendment to a previously passed piece of legislation. In March 2015 statement from the Housing Minister Brandon Lewis (there has been 15 different ministers within 20 years – hardly continuity) which stated ‘local planning authorities… should not set… any additional technical standards relating to the performance of new dwellings’ therefore, leading to no reason, both economic and incentives for the industry to improve upon these standards.

The UK Green Build Council describes the state of the industry in this regard as ‘no balance in ambition, consistency and local context with the 2013 aim to decrease the total emission to 19% (not met) without any control or elements.’ There is no overarching strategy. It enables disruption and penetration of the NPPF with the focus on sustainability and the associated concept of sustainable development. Within the wider context of sustainable, there are 12 parts of sustainable definition relating, quite rightly to the whole context of housing but only one directly relates to the ecological sustainability. If as the direction of travel seems to be, in the context of housing supply limitations and the need to perhaps, encroach onto the greenbelt this ecological ‘pillar’ needs to be given greater credence. This inevitably leads to discrepancies between regions, areas and local authorities. This leads to a greater uneven distribution of houses spatially leading to a disproportionate demand on services in varying locations, all in turn leading to a poor outcome for all home occupiers.

This lack of an overarching view leads to local authorities, often not fully informed and privy to local lobbying placing codes or arcane rules into their locality without fully being able to know or understand the permutations. A prime example of this is Fareham District Councils WEL 36 policy where ‘proposals for residential developments shall incorporate 10% of dwellings built to Passivhaus Standards, unless it can be demonstrated as unviable by means of a financial assessment which clearly demonstrates the maximum proportion of dwellings built to Passivhuas Standards which can be achieved’. Like most policies, particularly on a local level this definition is well intentioned but poorly drafted and filled with a litany of holes. Firstly, how could a local authority, without an in-depth specialised knowledge of sustainable procurement and development techniques gather the viability of a development? How could the costs associated with a variety of contracts for 90% of the build and the other 10% be incorporated? Viability assessments as shown by the Park House Road precedent in 2018 shows how often larger developers have tried to ‘game’ the system. This ‘gaming’ the system for a SME developer such as Archerfield creates another barrier within this highly oligopolistic market.

There is an obvious need for consistency throughout the market through public policy consistency. This will allow for all parties to know and to understand the rules within which the market operates. This enables specialism, within specialism comparative advantage for all firms within micro markets occurs. It is then up to those companies to make the end user understand the benefits of the sustainable differentiated product. This may come from marketing or through the passage of time as the demand from informed local authorities/customers requirements. The overall direction however, is affordability, with affordability it mustn’t just come from mortgages (currently abnormally low) but from running costs especially, given the volatility in the related energy costs.