- Analysis shows meeting new government standard increases costs £5,000 to £8,000 per plot
- Report makes six key recommendations to help the sector meet environmental targets while delivering affordable, desirable homes
Arcadis has collaborated with leading stakeholders from the housing and construction sectors, collating and analysing data to offer a critical roadmap to achieving scalable, affordable, and sustainable housing solutions that will need to be adopted as part of the ambitious growth targets for the sector.
Evaluating seventeen projects that have delivered over 1,000 homes across the UK under the Future Homes Standard (FHS), Arcadis notes the challenges to the implementation of this policy, which mandates that all new homes built from 2025 must be zero carbon ready. Analysis showed that the transition to low carbon technologies, coupled with building fabric requirements, will result in cost uplifts of approximately £5,000 to £8,000 per plot above current (2021) Building Regulations, with smaller projects likely to be disproportionately affected.
The analysis underscores the need for an integrated and coordinated housing strategy to address the dual challenges of delivering large volumes of new homes during this Parliamentary term while meeting net zero objectives. It explores the opportunities and challenges associated with the adoption of new technologies, modern methods of construction (MMC), and innovative design approaches, as well as the policy reforms and financial incentives required to drive meaningful change in the sector.
James Knight, Arcadis Residential Sector Leader, said: “ With coordinated Government action, the UK can deliver homes that are not only environmentally sustainable but also desirable, affordable, and aligned with the values of modern buyers. This is a challenge the housing sector is eager to meet and one the Government needs to get to grips with.”
Recommendations
To support the rapid delivery of new homes while achieving the Government’s carbon goals, Arcadis makes the following recommendations in this report to government and industry leaders:
- Reform Energy Pricing Structures: Affordability for FHS compliant homes is hurt by the disparity between electricity and gas prices. The government should decouple electricity prices from gas to reduce the financial burden on homeowners adopting low carbon technologies.
- Expand the Range of Accepted Energy Sources: The FHS should include provisions for a broader range of energy resources beyond just heat pumps, including solar panels, zero emission boilers, and infrared heating.
- Develop an FHS Brand: To build consumer confidence, the Government should establish an FHS brand that emphasises quality, affordability and sustainability.
- Enhance Affordability Through Green Finance: The Government should look to expand access to green finance products to reduce upfront costs for buyers.
- Support Supply Chain and Skills Development: The Government must address the supply chain constraints and skills shortages associated with delivering FHS complaint homes, to both develop the sector and reduce consumer costs.
- Focus on Quality: The National Housing Strategy should look to prioritise quality to create a more attractive new homes market for buyers.
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