Ground Zero – Zero Carbon Residential Development In London From October 2016

From this week (1st October) all new major residential development in London will be required to be zero carbon which will increase costs for development and the time to complete Energy Statements to support planning applications.

In the recent publication of the guidance to developers for Energy Statements, the GLA reiterated their London Plan policy 5.2 commitment of zero carbon residential development from 2016. The timetable was updated to mean that all phase 1 planning applications received by the GLA after September 2016 would have to pay to offset residual regulated CO2 emissions.

The implications of the policy are that energy assessors now have a carbon price target to evaluate the cost/benefit of installing emission-saving design features or simply paying to offset emissions. The GLA are seeking to maximise the carbon efficiency of new buildings and are willing to accept that development will become more expensive. In the context of the London Housing market which is anticipating price increases of circa 25% over the next 5 years, the GLA will accept adding 1.0-1.4% to overall build costs. The GLA have detailed this cost uplift within their 2015 Housing Viability Assessment report.

The way that the policy is framed offers some (limited) flexibility for development: dwellings are still expected to reach the 35% emissions reduction target from on-site measures; hence the emissions offset being required for the remaining 65%. How closely the GLA will police this requirement will be discovered after the 1st of October though, as the emissions offset payments will be used by Boroughs to fund emissions reduction schemes, there could be a case for paying into these rather than install a marginally beneficial technology at a development.

In some ways the GLAs policy marks a continuation of the Zero Carbon policy commitment that was axed by the Treasury in July last year. At the time the UKGBC Chief Executive Julie Hirigoyen noted that the removal of the policy was “short-sighted, unnecessary, retrograde and damaging to the house-building industry, which has invested heavily in delivering energy-efficient homes. Britain needs more housing but there is no justification for building homes with a permanent legacy of high energy bills”.

Despite Brexit, GLA planning policies on energy will be in place to guide London developers for at least the next 12 months. In order to generate a successful Energy Statement Greengage have set out our Top Steps for Energy Statement Sucess.

For more information on how Greengage can help please contact Iain Fraser.