SGP suggests opportunities and competitive advantages for forward-thinking residential developers
The Government’s ban on gas boilers in new builds is now only four years away. Whilst this directive presents many immediate challenges for housebuilders, research by Stephen George + Partners (SGP) suggests there are opportunities and competitive advantages for forward-thinking developers
As part of a range of measures to meet the UK’s legally-binding climate change targets, the Government has strongly indicated that its new Future Homes Standard will include a ban on the installation of gas boilers in new build properties from 2025. The sudden removal of one of the most widely used forms of heating from Britain’s homes presents significant challenges to housebuilders, not only in the way new homes are designed and delivered, but also how they are marketed to the public.
Whilst a number of major housing developers are already exploring alternative heating solutions and are busy getting their supply chains in order, many others are carrying on as normal and will undoubtedly only look to change when required to. Yet with only four years remaining before the new policy comes into force, it is our view that housebuilders need to address the issue now. The introduction of the new Future Homes Standard will have a rapid impact on supply chains, trained installers and product availability, and some regional and small to medium developers could be left out, with some even priced out of the market because the competition has eaten up all the capacity.
There are a number of alternatives to gas central heating being proposed, such as heat pumps, electric heaters, biogas and hydrogen. Research conducted by SGP over the last 18 months into these technologies suggests that – for both practical and cost reasons – air source heat pumps (ASHP) are the best immediate solution and we’ve been working with suppliers of the technology to try and assess what that means in practical terms for housebuilders.
Firstly, it’s not just a simple case of switching out the technology, it does have impacts on other elements of the design and construction of a new-build home. This is particularly true for the installation of ASHP tech, where the implications of no longer being able to hide the heat source in the kitchen or in a cubbyhole on the landing will require clever design solutions to disguise or locate the kit on external areas.
Equally, as heat pumps work best with low-temperature heating systems, there may also be a need to move away from radiator-based heating systems to underfloor heating. Whilst this could prove quite a challenge for the typical developer housetype, it does allow for more useable space and opens up opportunities for a re-think on the interior design and specification of homes, such as the size and location of windows.
Inevitably, there are also cost implications. Although more cost-effective than some of the other alternative heating solutions on the market, heat pump technology is potentially more costly than gas, in terms of upfront cost but also in terms of running costs. Whilst we anticipate the capital cost of heat pumps to decrease as the phase out of gas boilers gathers pace, it is vital that new homes installed with ASHP technology do not end up costing owners more to heat than with gas. We would therefore urge housebuilders to take this opportunity to address the energy performance gap in new homes. This is critical if developers – and landlords – want to futureproof their properties and make them more attractive to buyers.
There is evidence to suggest that, as the market matures in the wake of the new Future Homes Standard, there will be an increasing awareness and expectation from homeowners and tenants to live in an energy-efficient property and pay lower energy bills. In a 2020 survey by Savills, 49% of homebuyers stated green credentials had become more important in their purchasing decisions, whilst 29% of new homes buyers surveyed by Redrow said that energy efficiency was the most important factor in choosing a home.
Architects can play a critical role here, working with our housebuilder clients and engineers to improve the building fabric of new homes through better insulation and air tightness performance so that less energy is required to heat a house in the first place. Our experience with computational design tools such as Revit is a major advantage, allowing us to take a developer’s typical housetype and analyse the energy efficiency issue from design through procurement of materials, and on through the construction stages to completion.
Lastly, and perhaps the biggest challenge for developers, will be consumer awareness. Heating systems powered by heat pumps work in a different way to gas heating systems; housebuilders and their sales and marketing teams need to be provided with the tools and information to promote these new low-carbon properties to a public who are used to heating on demand and are often resistant to change.
In sharing our research and knowledge with housebuilders via a series of presentations and workshops we hope to not only prepare their procurement and delivery teams for the imminent requirement to install alternative heating technology, but also to support their sales and marketing teams. Armed with well-researched qualitative and quantitative data, they can better drive sales whilst also educating purchasers how to use their homes to reduce their energy consumption and costs.
Those developers who prepare early for the inevitable changes contained within the Future Homes Standard can steal a march on their competitors, not only by readying their supply chains, but by promoting their homes to an increasingly discerning market seeking out low-carbon, energy-efficient housing options.
If you want to learn more about the installation of heat pump technology and discuss how SGP can help, please contact: Peter Brown