One of the conclusions of the recent Stern Review on the economics of climate change was that ‘climate change is a serious global threat and it demands an urgent global response’. The report made it clear that the potential costs of unchecked climate change are far higher than the costs of acting now by taking preventative action. In the UK approximately a quarter of carbon emissions emanate from domestic premises. At the same time, it is widely acknowledged that there is a shortage of housing due to factors such as fractured families and increasing longevity. The government has responded to this conundrum by setting a planning framework for lowcarbon development, tightening the Building Regulations (Part L) and, most recently, by implementing the ‘Code for Sustainable Homes – A step-change in sustainable home building practice’ (the Code).

Background

The Code was published on 13 December 2006 and has been billed as a national standard for the sustainable design and construction of new homes in the UK. It has drawn impetus from the EU in the form of the Energy Performance of Buildings Directive (EPBD), which was implemented, as the name suggests, to improve the energy performance of buildings. The EPBD will work in conjunction with the Code by requiring the preparation of energy performance certificates when new homes are constructed, sold or leased. The energy performance certificates will form an essential part of the Home Information Packs that the government is planning to introduce on 1 June 2007 to help improve the home buying and selling process.

The Code replaces the Building Research Establishment’s (BRE) Eco- Homes System, which applied similar energy performance-based principles to the social housing sector. It also builds on Part L of the Building Regulations, which requires the use of energy-saving insulation and more efficient plant and equipment in buildings to reduce carbon dioxide emissions.

The Code is integral to the government’s plans for all new homes to be zero carbon-rated by 2016. The government’s definition of zero carbon is ‘zero net emissions of carbon dioxide from all energy use in the home’. This means that the amount of energy taken from the National Grid is less than or equal to the amount put back through renewable technologies.

The government’s impression is that its plans will almost certainly lead to the formation of partnerships between housebuilders, utility companies and local councils to deliver renewable energy.

Six levels of performance

The Code provides six levels of performance and has been designed to provide regulatory certainty in relation to the integration of sustainability into house building. In order to achieve level six, the home will need to be completely zero carbon. This will require the use of technologies such as solar panels, biomass- fuelled electricity, wind turbines, combined heat and power systems (CHP), district heating and cooling systems (DHS), aquifer thermal energy and ground source heat pumps (GSHP). There are minimum standards for energy and water efficiency, requiring high levels of performance in these areas for a high overall Code rating.

In the other point-scoring categories (materials, surface water run-off, waste management, pollution etc), the performance requirements are more flexible, so that builders have the freedom to choose the areas and methods by which they score their points. It is hoped that this flexibility will stimulate technological innovation in the design and construction of sustainable homes. This is likely to have cost consequences for builders, as the emphasis is on them to invest in design innovation. While large housebuilders are likely to have the technical resources to adhere to the demands of the Code, smaller house-builders may find it more difficult to adapt.

Compliance

Compliance with the provisions of the Code is voluntary but the government is considering making assessment under the Code mandatory in the near future. It is thought that the Code will form the basis for the next wave of improvements to the Building Regulations. In any event, house-builders cannot afford to ignore the Code, as there is growing demand from purchasers for homes that offer reduced environmental impact. In addition, energy performance certificates are set to become an important part of the home-buying process.

Some house-builders have taken a view that the Code will become mandatory before long. Therefore, they are now seeking to get ahead of their competitors by actively promoting their adoption of the Code and investment in sustainable house building. Furthermore, the pain of increased costs for house-builders will be ameliorated by the government’s pledge of stamp duty relief for ‘the vast majority of new zero-carbon homes’. These will be homes that achieve the requirements for level six of the Code.

A green revolution

Detailed technical guidance on the Code will be published by April 2007 and the government is working to apply the principles of the Code to commercial and public buildings in keeping with the EPBD. In the meantime, while there is uncertainty in relation to the Code’s application, it is clear that the green revolution is enveloping the construction and housebuilding industry.  © Property Law Journal