BUILDING REGULATIONS, MARCH 2022
TECHNICALLY SPEAKING Technical insight and expertise
A STEP IN THE RIGHT DIRECTION by James Ginley, FRICS Lenders need to prepare for new building regulations to address carbon emissions from 15 June 2022.
The government has proposed an interim uplift to building regulations to make sure homes emit less carbon, protect against over-heating and improve ventilation before the Future Homes Standard comes into effect in 2025. Homes built after 15 June 2022 will be subject to changes delivered through updated and new regulations and statutory guidance. The main changes to the regulations in June will include a new way of measuring energy efficiency using a new primary energy performance metric, a requirement that new homes emit 30% less CO2 than homes built today, new regulation on overheating mitigation, updated ventilation standards, and finally a requirement that new homes are fitted with electric vehicle charging stations. Clearly, understanding these changes and their impact on newbuild lending policy will be important for lenders in assessing new-build value.
As we improve the energy efficiency in homes, there is more risk of overheating. The strategy to reduce overheating risk should be selected according to the location of the new building and whether it has cross ventilation. Most houses will have cross ventilation, however most flats will not. This will impact homebuyers, landlords, and investors. But along with understanding the risks of overheating in homes, there is now a need to improve the conservation of fuel and power. The Future Homes Standard will mandate that homes will produce at least 75% less CO2 emissions so the interim changes are a steppingstone towards full compliance with this standard. The standards can be met by improved fabric energy efficiency, more energy efficient building services and low and zero carbon technologies.
How these interim steps will impact on values is a work in progress, but it is important to take note of these energy efficiency and technological improvements and their impact on present and future values. The government is encouraging mortgage lenders to improve the EPC ratings of their portfolios and (if as predicted) lenders begin to stipulate different mortgage rates for properties based on their EPC ratings, EPCs and energy efficiency measures could increasingly have a financial value moving forward. If you want to know more about how we think that might work, get in touch via email to james.ginley@esurv.co.uk
The emphasis will be on the adoption of a fabric first approach with higher minimum fabric standards for the envelope and improved airtightness, along with the use of low-carbon heating technologies. New homes built to these standards will be more energy efficient, have more efficient buildings services, electric car charging points and emit less carbon. As the properties will be more aligned with the Future Homes Standard, they should also require less retrofitting in years to come compared to homes built under current standards. It follows on that these properties should also have a higher EPC rating. The approved documents take effect on 15 June 2022 for use in England. The regulations will not apply where a building notice or an initial notice has been given to, or full plans lodged with a local authority before 15 June 2022, provided the work is started before that date.
ABOUT THE AUTHOR James Ginley is a Fellow of the Royal Institution of Chartered Surveyors and Director of Technical Surveying at e.surv Chartered Surveyors. A qualified surveyor, he is a member of the Equity Release Standards Council. Email James at james.ginley@esurv.co.uk.