The Social Cost of Sustainable Housing in the U.K

QS Week - 14th January 08

In December last year the government raised the bar in its demands for more sustainable homes to be delivered in the UK and revealed the final outline version of its new Code for Sustainable Homes strategy.

Designed to replace the current EcoHomes policy for new homes from 1st April 2007, the code will be mandatory for all new homes from April 2008 and will have six levels of performance with the most sustainable homes being given a six star rating.

The government has targeted its own public sector with some of the strictest deadlines for this new performance related legislation, presenting significant cost implications for many housing associations but no additional budget!

A directive for housing associations to reach a fairly realistic Code Four status by 2012 was unveiled last December. At the same time an additional date for the diary was revealed when, by 2016, the government says it expects the carbon neutral status Code 6 to have been achieved by the same audience.

This is an almost impossible task with funding being a key-contributing factor. There is evidence that rents and prices are set to increase as a result of the investment in renewable technology in private sector housing yet, Housing Associations are being pushed to greater capital spending on each unit with no reflection of this in operational costs.

Renewable technologies are generally not commercially viable in capital terms but tenants will receive the energy saving from this investment. However there is no quid pro quo for the Housing Associations in increased rental.

The pot of money currently available for the same number of units is finite and although the Housing Corporation is examining the possibility of additional funding to try to gap fund, there is currently no promise of further funds.

As a result, the Code for Sustainable Homes could actually reduce the number of units that can be funded. This is a major disincentive and in direct conflict with the HBF's view that we need an additional 60,000 new homes per year.

Sustainability in housing is most definitely the way forward and the government is keen to lead the way but is doing so in the wrong direction. Being panicked into issuing unrealistic targets and spending more money to reduce the number of social homes available on the market is self defeating. It simply brings two conflicting government goals to the table!

The way forward is to analyse the viability and deliver social housing on the basis of whole life costs not merely capital costs. The government should be realistic in its approach and invest additional funding to reap the rewards of a more tangible and sustainable long term housing future.