It has been a busy end to the year with a lot of issues on the agenda. Since my last update, we have held meetings with ministers at Treasury and CLG and with senior officials at Treasury, CLG, No.10 and the Bank of England. These were partly with a view to influencing this month’s Pre Budget Report, more on which is below, but also on the wide range of issues currently ongoing. With an election due possibly as early as March the likelihood is that the New Year will be equally as busy.
ECONOMIC AFFAIRS
Pre-Budget Report (PBR)
The PBR contained two measures with a direct impact on home builders. It also signalled that the run-up to the 2010 Budget is going to be a very busy time for the Government and for HBF.
A coalition of housing bodies, including HBF, did not manage to persuade the Chancellor to extend the stamp duty holiday beyond 31st December. Given the state of the public finances, this is perhaps no great surprise.
HBF had already successfully persuaded the Government and HCA to extend the deadline for HomeBuy Direct (HBD) from 31st March to 30th September. In the PBR, the Treasury announced that £100m of funding from the original programme for 2009-10, which was not likely to be spent, would be carried over into 2010-11. In addition, £50m of funding from the Kickstart programme will be allocated to HBD. I understand there has been particularly strong developer interest in HBD in Kickstart 2. The Government now estimates that HBD will generate some 10,000 sales from the stand-alone programme, plus around 3.000 sales via Kickstart. This is a very significant and welcome initiative for the industry.
The PBR has promised a whole series of studies and consultations in the period up to the Budget: local authority five-year housing land supplies and the cumulative impact of regulation, both of which are direct responses to strong representations by HBF, call-in periods, release of public sector land, Lifetime Homes (the Government has postponed its introduction until at least 2013), the appropriate use of S106 agreements following the introduction of CIL, improving diversity and innovation in home building, and the private rented sector. A summary of the responses to HMRC’s recent consultation on “false self-employment” will be published in the New Year, as will detailed arrangements for implementation of CIL from April 2010.
The work on the cumulative burden of regulation is particularly significant. The Government will now establish a “national baseline” of all central and local policy and regulation with an impact of home building so that current burdens can be reviewed and all future policy and regulatory proposals assessed within the context of existing burdens. I think HBF can legitimately claim to have brought about a fundamental change in the Government’s approach to policy and regulation. I am enormously grateful to the small group of members who have given up so much time, and brought so much expertise, to help us run this highly successful campaign.
Kickstart
The HCA has announced that 265 bids totalling nearly £550 million have been shortlisted for Kickstart 2. Bidders have been notified and include a mix of Registered Social Landlords (RSLs) along with national and local developers. In total the package aims to unlock up to 22,000 homes across the country
For further details go to www.homesandcommunities.co.uk/kickstart_housing
CML Disclosure of Incentives form
The Building Societies Association (BSA) will, from 1st January 2010, introduce its own handbook of instructions for solicitors acting for its members. The BSA had originally suggested it might introduce its own Disclosure of Incentives Form from 1st January. However I am relieved to advise that we have persuaded the BSA this would have created a very difficult situation for home builders. Instead, the BSA will, from 1st January, advise its members to use the existing CML Disclosure Form, available on the HBF and RICS web sites.
HBF Public Private Initiatives Group
In response to the growing number of initiatives involving joint working between the public and private sectors (e.g. HBD, Kickstart, Public Land Initiative, Affordable Housing), we have established a new member group entitled the Public Private Initiatives Group. Its first substantive task will be to look at the future of Affordable Housing funding and provision. This is going to be an increasingly important issue for the industry given looming public spending constraints and the sizeable reductions in land value available to fund Affordable Housing through S106 agreements.
EXTERNAL AFFAIRS
Conservative Party Policy
At the time of writing we are still awaiting the publication of the Conservatives’ much-anticipated green paper on planning. This is now expected early in the New Year. The paper remains a potentially important indicator of how the Conservatives see a bottom-up approach to planning delivering housing .and I believe it will be one of the most important housing policy developments before the general election.
We have meanwhile continued to engage regularly with the Conservatives’ front bench team and recent discussions have been reassuringly constructive. Our sense is that the practical delivery issues we have raised are being considered. We must hope that this will be reflected in the party’s further policy statements.
False self-employment
HBF joined with the Federation of Master Builders and others to launch a lobbying campaign with the aim of persuading the Government not to proceed with its proposals to change the tax rules applying to self-employment in construction.
The Treasury has proposed a radical change to the current system that would see all people working in construction classified as employed for tax purposes, unless they met the terms of one of three relatively limited proposed exemptions. Such changes would be particularly unwelcome to many in house building given the importance of a flexible workforce for the industry.
In the recent Pre-Budget Report the Government indicated that it had not yet reached any final conclusions on this issue and would continue to “work with stakeholders to develop a legislative solution that is well targeted, effective and that allows the industry to retain a flexible labour supply.” This suggests that the arguments we have put to Government have had some effect, but we clearly need to continue to pursue a satisfactory outcome to this issue.
Energy Performance of Buildings Directive
A political agreement has now been reached between the European Council, the European Parliament and the European Commission on the revision of the EU Energy Performance of Buildings Directive.
The result is satisfactory from the UK Government and industry perspective. The revised Directive will require Member States to ensure that from the end of 2020 all new buildings attain a "very high energy performance” standard entailing “nearly zero” energy for heating, cooling and lighting with their energy needs “covered to a very significant extent from renewable sources, including energy produced on-site or nearby”
Following active representations by the HBF, Government has assured us that this outcome will not cut across the existing zero carbon homes policy requirements.
Zero Carbon Homes
The Zero Carbon Hub concluded its important work on proposals for a metric and minimum energy efficiency performance standard for new homes under the zero carbon policy in early November.
Following presentation of the Hub’s report to Housing Minister John Healey, he has announced that he is satisfied t the recommendations strike the right balance between a high level of ambition and a standard that can be realised in practice by 2016. The proposals are that standards should be measured in kWh/m2/year with maximum levels of 46 kWh/m2/year for detached, semi-detached and end-terrace homes and 39 kWh/m2/year for flats and mid-terrace homes.
I believe the Hub has done a good job in engaging with the industry and other stakeholders within a tight timescale to produce broadly practical proposals that could be achieved across the full range of dwellings and development contexts. We do, however, need some more time to fully assess the implications of the proposals and any issues they may raise. It is welcome therefore that the Government will be consulting on the proposals as part of the imminent consultation on the revision of the Code for Sustainable Homes.
PLANNING AFFAIRS
Community Infrastructure Levy
Following the consultation on the draft regulations and guidance for the proposed Community Infrastructure Levy (CIL) which ended in October, CLG has held further meetings with both the policy group and the practitioners forum, both of which HBF sits on. We are, therefore, hopeful that the comprehensive representations we made in response to the draft documents regarding the need for considerably greater clarity and, in some case, a more fundamental change of approach, will be taken forward into the next iteration of the legislative framework. I would remind members of my report last month which drew attention to the fact that there are concerns over the current draft CIL regulations, not just from ourselves and the rest of the development industry, but also from both the professional and political sides of local government.
The parliamentary process from here on in is somewhat complex. CLG will amend the regulations and guidance in response to the consultation process and will submit the new drafts to a Government select committee for debate and further amendment. This is likely to happen in early February next year. The Committee will then report to the full House of Commons with a recommendation to accept the new regulations and the Commons will hold a vote. There is no opportunity for the Commons to amend the regulations – the vote will either be to accept or reject them.
Assuming the Government wins the vote, the regulations will be passed and CIL will come into force on 6th April 2010.
However, as I have also previously reported, that is not to say that CIL payments themselves will come into operation on the 6th April. The regulations require local authorities to have in place an adopted core strategy and an adopted infrastructure plan, and their proposed charging schedule must be tested at an independent inquiry before charging can commence. Thus, even with a fair wind (and we are certainly not in such sailing conditions so close to the general election) it is unlikely that any authority will be able to charge CIL for close to a year after the commencement date.
Obviously we have also been talking to Conservative front benchers about their attitude towards CIL. Indeed, if, as some people are now suggesting, the election is called for March it is unlikely that the regulations will be passed in time. However, if they are placed on the statute books it is still unclear as to whether or not the Conservatives will repeal them. We know that they are keen to simplify the S106 process and that they are clearly seduced by the tariff based approach towards developer contributions. So we could well see a similar approach taken to CIL as we have seen to the Infrastructure Planning Commission (IPC) whereby the Tory public position is to scrap it but, in reality their alternative proposal is relatively similar to what exists.
Killian Pretty Review implementation
We were pleased to see the publication of the much needed guidance on the new procedures for greater flexibility of planning permissions, particularly regarding extensions to the time limits for implementation. The guidance note can be found here:
While we still await the necessary changes to the fee regulations to get through Parliament (and thus reduce the fee from the normal full application fee to a standard single fee of £170 for minor applications of less than 10 dwellings, and £500 for major applications) this is expected to be achieved this side of the Parliamentary Christmas break.
We are being made aware of the reluctance of some local planning authorities to favourably consider applications, and the guidance note should be helpful in minimising such practice. There is, of course, the right to appeal against the refusal of such applications in the usual way.
TECHNICAL AFFAIRS
Gas flues in ceilings
At our latest meeting with the HSE and Gas Safe, the results of the recent HBF survey were reviewed. The figures have clearly demonstrated that our members have acted responsibly and, as such, HSE appears to be happy that the risk going back to June 2007 is very minimal.
They still have concerns surrounding dwellings prior to 2007, but they realise that it would be inappropriate to put “at risk” notices on all properties that cannot have their flues checked.
Therefore the TB008 Group is to be asked to look at this further in terms of suggesting what types of installations etc should be classed as “at risk” and those that should only have a “not to current standard” rating.
Code for Sustainable Homes
The Consultation on the Code for Sustainable Homes was launched earlier this week. HBF will be organising member meetings to discuss and formalise a response. Responses need to be submitted by March 24.
HBF members are still experiencing significant problems with regard to the Surface Water Run-Off (SUR1) section of the Code. These concerns are all being fed through to CLG.
Zero Carbon for New Non-Domestic Buildings Consultation
The consultation for zero carbon for new non-domestic buildings was published last month. It relates to proposals for working towards the Government’s ambition that all new non-domestic buildings should be zero carbon from 2019 with the public sector leading the way by 2018.
With regard to mixed use developments, it is important the requirements in this consultation do not conflict with those that will be required for new homes. HBF will therefore be submitting a response.
A meeting/workshop to formulate our response will be held in the New Year either in London or Birmingham. Any member wishing to take part in this response process should contact dave.mitchell@hbf.co.uk The closing date for submissions is 26 February 2010.
Building Regulations
Part F (means of ventilation) and Part L (conservation of fuel and power) - CLG is still assessing the responses to this consultation and will publish them shortly. It is anticipated that the new parts will become effective from October 2010. As such, we could expect to see the revised parts and all associated information by around April 2010.
Part J (combustion appliances and fuel storage) - this consultation has now closed and responses are being collated by CLG. Part J will come into force in 2010, most probably around October along with Parts F and L.
AND FINALLY...
I hope you have found this report useful and as ever, should you require any further information on anything or indeed wish to let us have your views on any of the items please don’t hesitate to contact me or any of the team at HBF
All that remains is for me to wish you on behalf of all at HBF a very peaceful Christmas and New Year. I will update you again at the end of January.