Posted by: Jules Birch07/12/2010
After a tough three years, housebuilders must be starting to think Christmas has come early.
The scrapping of new core building standards announced by Grant Shapps last month is the obvious neatly gift-wrapped present nestling beneath the tree but it is far from the only one.
The housing minister told the annual lunch of the National House-Building Council that the standards proposed by the Homes and Communities Agency (HCA) for homes built on public land or with government funding were an ‘unfair and unnecessary expense’ that would have cost builders an extra £8,000 per home.
But he also pledged to get rid of an ‘alphabet soup’ of local building standards and red tape and invited housebuilders to ‘be in charge of developing a new framework for local building standards - one which enables communities to get the high quality homes they demand, but without causing unnecessary costs and delays for developers’.
The Royal Institute of British Architects (RIBA) was quick to condemn a move it said would condemn thousands to poor housing and pointed out that the core standards were actually designed to harmonise regulation and give the industry more clarity.
But you don’t have to be an architect to wonder about the future of a system after a month in which we also learned that a third of new social housing schemes were given exemptions from national sustainabilty standards and a quarter of schemes funded in the latest round of Kickstart were rated ‘poor’ (CABE, the agency that delivered that verdict, is being scrapped).
Earlier - and also part of the drive to eliminate red tape - the government simplified the code for sustainable homes and a re-definition of the zero carbon status that all new housing will have to meet by 2016 is due early next year.
On Monday Shapps denied claims by environmental campaigner George Monbiot that the government had effectively abandoned its commitment to zero carbon by reducing the amount that emissions will have to fall compared to 2006 levels. The minister drew a clear distinction between environmental standards and ‘the minefield of overlapping and confusing building standards that have built up in recent years’.
And then there are those 150,000 new ‘affordable’ homes promised in the spending review. Stretching the definition of ‘affordable’ could have an impact on builders that goes far beyond the obvious one of generating more work for the same money.
Housebuilders already had more than a finger in the affordable housing pie through social housing grant, Kickstart and HomeBuy Direct. While they will continue to face section 106 demands for affordable homes, they could have much more flexibility over what counts as affordable. Could they even be able to assure potential buyers that there will be no ‘social housing’ near their new home - just ‘affordable’ housing like HomeBuy Direct?
As Brian Green first pointed out rather counter-intuitively on his Brickonomics blog, the spending review could actually turn out to be very good news for housebuilders despite huge cuts in investment.
He quoted the reaction from the Home Builders Federation (HBF) at the time which seems even more significant in retrospect: ‘Today’s statement by George Osborne included a welcome commitment to reducing regulation – something HBF has been pressing Government to tackle long and hard. We now need to see this implemented. This must include; an affordable and deliverable decision on the definition of zero carbon; and a more flexible approach to the definition of ‘affordable housing’, allowing developers to play their part in providing innovative solutions to meet peoples’ needs.’
It have a point about the amount of regulation introduced during the boom but the recession and housing market downturn have strengthened housebuilders’ hand in planning talks with local authorities. Anecdotal evidence suggests that they have been able to replan existing schemes and renegotiate section 106 agreements with lower developer contributions. Deregulation will given them even more incentive to do so.
The introduction of the New Homes Bonus could put them in an even stronger position because local authorities will need to maximise the number of homes to gain bonus and avoid being penalised through the formula grant system.
Housebuilders may have had to swallow the end of regional building targets. They are still complaining about a lack of guidance during the transition from the old system to the new. But in an age of austerity all that red tape makes great gift wrap for Christmas.
From Inside edge
Housing commentator Jules Birch puts the latest news in context