Code Red

This article was produced by Olswang LLP, which joined with CMS on 1 May 2017.

The Government’s Housing Standards Review

aims to simplify the framework of building regulations and housing standards in England.

It recommends winding down the Code for Sustainable Homes. This is the Government rating method for new homes and enforces sustainability standards above Part L of the Building Regulations. A final decision is due shortly.

Under the Code, homes are assessed on a scale from 1 (lowest) to 6 (zero carbon) against nine categories including energy and CO₂ emissions, water, materials, pollution, management and ecology. Compulsory for publicly funded housing, it is otherwise voluntary but achieving level 3 or 4 under the Code has effectively become mandatory for many housebuilders. This is because some planning authorities include the requirement within their planning policies.

The review concludes that the Code leads to significantly increased development costs, delays for housebuilders and ultimately inhibits economic growth. It suggests that the Building Regulations alone should govern the technical and functional performance of dwellings.

The Code undoubtedly adds to construction cost. The Code’s assessors will also tell you about local authority bureaucracy, extensive paperwork and the requirement to report on issues irrelevant to the particular site to get boxes ticked.

But these appear to be reasons for reform rather than abolition. In fact, compliance costs up to level 4 decreased markedly following the narrowing between Building Regulations and the Code requirements in relation to energy and carbon emissions.

So it’s the third motivation given by the review that rings truest. With a shortage of housing, house prices remaining strong and a recovering economy, the Government wants to encourage development.

To replace the Code, the Government has three proposals. The first is a non-binding set of national environmental standards that can be applied at local level alongside the Building Regulations. The second approach, and its preference, is identical save that the standards would be integrated into the Building Regulations over time. The final option is to incorporate tiered environmental obligations into the Building Regulations, enforced by Building Control, with different provisions applying in different regions.

At the moment, it’s unclear how far the new requirements would extend. Unlike the Code, the Building Regulations do not currently cover materials, management or ecology (although the latter two, together with pollution, carry no credits under the Code). How the transition period would be managed is also a mystery.

With debates currently also raging in relation to ECO and the Infrastructure Carbon Review, it’s clear that balancing the short-term needs of the economy against longer-term green intentions remains a challenging task for the Government.