How Do We Create Homes Fit For The Future Webinar Q&A

Dr Oliver Jones, Research Director at Ryder Architecture:

I agree with the fabric first approach of passivhaus but have concerns about how occupant behaviour can lead to build up of poor air quality in passivhaus homes. I tend to lean towards more of the active house principles.

Dr Oliver Jones, Research Director at Ryder Architecture:

Systematisation and standardisation don’t mean a lack of flexibility or customisation, it is the intelligence of the system designed that defines this.

Scott Bibby, Managing Director at CoreHaus

The CoreHaus hybrid solution offers high levels of design flexibility in terms of appearance, to gain the full benefits and efficiencies of off-site construction then it is better to maintain a level of standardisation. This standardisation allows for continuous improvements to be made, if you create something totally unique every time then it would be difficult to create a manufacturing process and extremely costly. We believe that standardising (with options) the complicated and often problematic part of the build you gain the most value from MMC, you can then alter the surrounding structure and appearance to suit.

Dr Oliver Jones, Research Director at Ryder Architecture:

Yes, the Retrofit Academy provide training and advice on this. A broader initiative needs to be led by central and local government to upskill the workforce if we are to meet our 2050 targets.

Scott Bibby, Managing Director at CoreHaus:

I believe that a new wave of highly skilled professionals are required to meet the demand, this will require an enormous drive from government, education providers and industry towards meeting demand. The risk of training existing trades people is that you compound the skills shortage issue and could introduce poor habits or practice.

Professor Paul Jones at Northumbria University:

Housing professionals from Local Authorities and Registered Social Landlords/Housing Associations etc should be part of Integrated Care Boards for continuity of service. Critical to joined up thinking, is that the housing stock has to be effective. Good quality housing can mitigate many of the issues associated with ageing, especially when someone is released from hospital. Houses should be designed with ageing in place as a principal concept with M42 and M43 compliance so that they are accessible and can serve the needs of the occupant. Digitally connectivity can help with step-down care when people (especially older people) return home. We have digital and smart technologies now available that can provide support to older people from carers and family members. This physical and digital infrastructure would help ICBs and reduce hospital and enablement costs.

Professor Paul Jones at Northumbria University:

At the minute the lending system is set up for short term gain and is risk adverse. The long-term reduced energy costs are rarely factored into improved mortgage offers, except for small scale environmentally focused lenders. Recently I built my own home, which is ultra-low energy and uses renewable technology, but I received no improved lending terms, in fact quite the opposite. I estimate it cost me an additional 15K in short term mortgage fees due to undertaking an eco self-build. Lenders set rates on the amount of money being borrowed and pay back terms; there is rarely a link to bills and lifecycle costs. The government needs to incentivise this in some way, if they are committed to energy efficient and sustainable homes. People wanting to invest in sustainable housing shouldn’t be penalised- its counter-intuitive to meeting our carbon targets.

Ann Bentley, Global Board Director at RLB, the UK's Government Construction Leadership Council and the CBI's Construction Council:

There are a number of things that need to come together to enable this to happen, including: Availability of finance, change in approach from property owners away from capital cost, a change in approach from residents who have choice in where they live and a change in regulations and Government intervention. Each of these are possible, but there is no single “silver bullet” that will make all of them happen.

Funding – although in the long term improving the fabric and heating systems of homes will save money there is a substantial up-front cost to doing this which will have to be funded. Simplistically there are only two sources of funding – Government or private sector – and ultimately both of these come back to householders – either through direct re-payment of loans or through taxation, or a combination of the two. In principle this may be an attractive area for the private sector as there is a clear return, but in practice there are issues of scale – funders generally want to invest £millions and would not want to have a direct relationships with millions of separate householders. There are also issues around where the “debt” would sit – would it stay with the property, so a new owner or tenant takes over the repayments (as they benefit from the energy savings) or does it sit with the householder which would mean that they have to repay it when the property is sold. If this is the case then residents who anticipate moving home in the next few years may not re-coup the up-front investment and so may be reticent to invest. There seems to be limited appetite for large-scale Government funding – the current Government approach appears to be to stimulate the market and the private sector. Funding is somewhat different in the rented sector – where the tenant rather than the property owner – would be the direct beneficiary of the energy savings, but the owner would bear the cost. 

This leads to the second point – a change in approach from property owners. In the private rented sector property owners have to determine if the additional rent that they could charge for a low-energy house would cover the loan repayments that they would have to make for the energy efficiency work to be carried out. At the moment there is little incentive for property owners to do this as they take on the risk of voids and unattractive rents. Most social housing landlords have a stated aim of reducing fuel poverty, and this is important to them, but they still have to wrangle with the difficult issue of charging higher rents for energy efficient houses.

What might change things more quickly is residents’ attitudes. If energy costs continue to rise and concern about global warming gets stronger, then residents who have a choice in where they live may start exercising this choice and low energy housing may attract a premium. If this is the case this will encourage both home-owners and private landlords to upgrade their properties to make them more attractive to the market.

Similarly, regulation will move both landlords and property owners in this direction. There are proposals afoot that all new domestic tenancies must reach an EPC C rating by 2025 and all tenancies must reach this by 2028. This is not get enshrined in legislation, but the Government has carried out a consultation on it. Similarly, there are suggestions that private properties that do not reach EPC level C will not be attractive to mortgage lenders in the future. This will give massive impetus to both landlords and private home own-owners to carry out improvement work – which takes us back full-circle to how will the up-front money be raised. There is anticipation that the National Infrastructure Bank may become involved, and a number of funders are looking at ways to enter the market and I imagine that this will develop over the next few years.

Dr Oliver Jones, Research Director at Ryder Architecture:

You can work with local authorities to identify and drive demonstrators. I’d also suggest applying to the latest round of MMC offsite funding released by the crown commercial service.

Scott Bibby, Managing Director at CoreHaus:

Homes England recently announced that 25% of its funding utilised by strategic partners must be on MMC, they have created a calculator to estimate the % of premanufactured value or PMV (minimum of 55% required). This announcement along with the continued growth of MMC has created a huge demand for off-site solutions and has presented multiple opportunities to scale up MMC. We regularly see the announcement of new MMC providers across the UK which indicates a strong growing market. We also see increased orders and pipeline for the current MMC market leaders such as ILKE homes (around 3.5k homes).

Many sites have been successfully delivered utilising MMC since the innovation village which improves perception and changes opinions around some of the earlier MMC myths.

https://www.cast-consultancy.com/pmv/

https://www.gov.uk/guidance/affordable-housing-funding-strategic-partner-application-process

Tracy Harrison, Chief Executive at Northern Housing Consortium:

The social housing sector is currently juggling three key priorities: delivering new housing supply, improving building safety, and decarbonising existing homes. These objectives all demand resources in terms of funding, staff and knowledge. On housing decarbonisation, the Government has a target for as many homes as possible to reach EPC C by 2035 “where practicable, cost-effective and affordable”, for the social rented sector this target has been set at 2030. They also have a target for 600,000 heat pump installations across tenures per year by 2028. We know that the Government will not reach their wider target of net zero by 2050 if they do not reach their targets on home energy efficiency and clean heat so they do need to invest in this. Funding is already available to the sector, such as through the Social Housing Decarbonisation Fund, but funding for housing retrofit has been short-term and competitive so it is not currently meeting the scale of the challenge. The NHC has recommended government allocate funding directly to Local Net Zero Hubs based on regional levels of fuel poverty.

The social sector has a higher proportion of EPC C and above homes compared to the private rented and owner-occupied sector, but housing providers are still ambitious to deliver more. Social housing providers are uniquely placed to deliver retrofit programmes at scale and pace to not only reduce domestic carbon emissions but also create healthier and warmer homes for tenants, cut household bills, develop supply chains, and support new green skills and jobs. NHC members are already acting on this, often in collaboration, but they could go much further with the right investment from Government. For example, research the NHC supported by IPPR North shows the potential for the creation of around 15,000 direct jobs in the North East through a large-scale decarbonisation programme (9,000 through housing retrofit installations and 6,000 through heat pump/network installations). 

The NHC will continue to make the case to Government that green investment in the energy efficiency of homes will see huge returns, both environmentally and economically, and can play a significant role in levelling up the regions.

The Northern Powerhomes report by IPPR North can be found here: https://www.northern-consortium.org.uk/wp-content/uploads/2021/04/Northern-Powerhomes-A-green-recovery-plan-to-decarbonise-homes-in-the-North1.pdf

There is a huge amount of information available on the challenges and opportunities of housing retrofit in the Northern Housing Monitor which you can access through this link: https://www.northern-consortium.org.uk/wp-content/uploads/2021/08/The-Northern-Housing-Monitor-2021.pdf

The report by Northumbria Uni on decarbonising the North East’s social housing stock also provides a comprehensive look into plans to decarbonise social homes: https://www.northern-consortium.org.uk/blog/new-research-decarbonising-social-housing-in-the-north-east/

Scott Bibby, Managing Director at CoreHaus:

In the North East we have 3 Homes England strategic partners who will be delivering around 2000 MMC homes in the next 4 years… this will create multiple high profile MMC sites locally.

Karbon Homes, Thirteen group and Riverside are all strategic partners and have been doing some interesting projects. We have been working with another forward-thinking housing association who are also based locally, Believe housing. https://www.linkedin.com/feed/update/urn:li:activity:6889862058821648384/?actorCompanyId=21260033

You can find out more about our solutions via our website https://www.corehaus.co.uk/ Feel free to contact our team should you have any further questions.