What Build Back Better really means for the UK housing market

There are excellent UK precedents for government interventions working to change markets for the better. In the energy market, UK government support for onshore and offshore wind turbines and attractive feed-in tariffs for domestic solar power generation have contributed substantially to our nation being able to meet electricity demand for extended periods without burning coal. As importantly in the context of new-build housing, government support in the energy sector has led to economies of scale in wind turbine construction and solar panel production, thereby reducing and eliminating the historic cost differentials.

So, the government should introduce legislation to require all new build homes from 2023 to achieve at least EPC A ratings, or preferably meet a Zero Carbon Standard.

This requirement should be backed up with stick and carrot incentives:

• A substantial levy (say £20,000 to £30,000) should be charged on developers and house builders for every new-build unit that fails to achieve at least an EPC A rating.

• To address the existing cost differential of building homes to a higher environmental standard, an initial subsidy (akin to a feed-in tariff) should be provided to developers and house-builders for every unit which does achieve an EPC A rating, with a higher initial subsidy provided for every unit which achieves a Zero Carbon rating.

• As volumes increase and economies of scale of production emerge, subsidies should be reduced to avoid undue enrichment by developers and builders.

• In any future Government support for first time buyers, there should be an absolute requirement for new properties to meet a Zero Carbon standard.




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