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David Alexander: green housing policies vs new homes supply

David J Alexander

In his latest column for The Scotsman, David Alexander discusses the relationship between green housing policies and the supply of new homes in Scotland:

Everyone agrees that we must do more to tackle the harm that climate change is doing to our world. There is broad unanimity about the aims of reducing emissions and cleaning up the environment, but many are also concerned at the timescale and the impact upon our everyday lives if strict regulations are introduced too quickly, and too severely.

The news that there are plans to ban the installation of all gas boilers from being installed in new properties in Scotland by as early as April 2024 struck a foreboding note. This sounds like a very short time frame for the construction sector to adapt and meet these new targets.

Building homes is generally planned in five-to-ten-year periods rather than a few months so it was perhaps not surprising that so many well-known building firms have expressed their concern that these new regulations will seriously impact upon Scotland’s target to build 25,000 new homes a year.

Companies such as Persimmon Homes, Cala Homes, and Taylor Wimpey have warned of “unintended consequences’ in introducing such a policy with Persimmon stating that: “Many fewer houses will be built. The housing crisis we are in will worsen. The construction industry is recognised as being a major driver in a strong economy. To significantly reduce the output of the housebuilding industry will result in a corresponding damage to the wider economy.”

Homes for Scotland, the industry representative body, said the plan would “significantly increase” the cost of buying a home and “reduce delivery.”

“This proposal will have a negative influence on the number of homes built in Scotland. We are likely to see a significant reduction of both affordable homes and private residential accommodation built in the short to medium term, as both the grid and supply chains are unable to provide the capacity needed.”

The new regulation seeks to exclude heating systems that produce “more than a negligible level of greenhouse gas emissions.” If this regulation is passed it would impact all new houses resulting in delays to existing and future approved developments which have not yet begun to be built. This would mean that plans to build homes which have already been approved but have not yet started would have to be changed, budgets altered to take account of this substantial change of heating supply, and delays would be inevitable.

The move is aimed at introducing greener alternatives such as heat pumps, solar and electric energy but these are generally accepted to be substantially more expensive to install than traditional heating systems. One estimate is that installing an air-source heat pump rather than a gas boiler is about £10,000 more. Clearly this cost will not be borne by the builder but will be added on to the cost of the property and paid for by the homeowner.

At a time when there is a severe shortage of new housing and when the number of newbuilds has been below historic levels this seems the wrong time to introduce such a dramatic change to the way we build houses. The extra costs, the additional skillsets required to install many of these heating systems, and the capability of the construction industry to adapt to these new regulations in such a short time frame will surely test the ability of the sector to meet its targets.

Surely the sensible approach would be for a moratorium on such radical changes until we have at least started to address the severe shortage of houses in Scotland and our building programme has begun to make some headway in producing sufficient homes to lessen the current record levels of demand. There will be a time when introducing such eco-friendly heating systems is appropriate but in the current marketplace, I don’t believe that it makes sense to slow down construction and reduce the supply of new homes in Scotland.

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