Month: March 2020

A sustainable housing development in London is striving to create next-generation homes that reduce impact on the natural environment. 

Eden House, described as a sustainable oasis in the heart of London, has been developed by Fornacelli Homes. It comprises four mews houses and five apartments, and is surrounded by a supportive infrastructure including restaurants and shops.

Having a strong focus on sustainability, Eden House is powered by renewable energy harnessed from solar panels fitted in the roof. The 42 Sunpower solar panels can each generate 400W, which provides efficient energy to the building’s residents when they need it.

Mechanical Ventilation and Heat Recovery (MVHR) will provide an ambient temperature year-round, all the properties will include an outside space, and the external and internal green walls help to purify the air and improve London’s biodiversity. 

The cladding is impressive too: a mix of cedar cladding, London stock brick and zinc cladding, while textured render which envelops the building helps to protect it, as well as reduce energy bills and carbon dioxide emissions. 

Gian-Franco Cencelli, director of Fornacelli Homes, said: “Our aim is to prove that sustainable homes can be stylish and beautifully designed. Eden House is a beacon of tranquillity a stone’s throw from London’s cultural hub. It is one of the first carbon-neutral developments in London and we are incredibly proud of the finished result.” 

Eden House is located in Crouch End, North London, and was designed in collaboration with interior design company Mood London Design. 

What are the Benefits of Sustainable Homes?

Self builders can make notable savings on their long-term energy demands, and thus energy costs, by integrating renewable technology for heat and power into their project.

(MORE: Self Build: The Complete Guide)

Upgrading your home’s energy rating can lower carbon emissions and tackle climate change, and also increase your home’s value by up to £25,000. 

Developments such as Eden House, West Carclaze Garden Village and Derwent Forest are showing how sustainable building projects can improve our living conditions and have a transformative impact on the environment. 

Wednesday’s Budget revealed the government remains committed to reach net zero emissions by 2050, and it plans to deliver a revolution in green housing.

Housing secretary Robert Jenrick confirmed the government will introduce a Future Homes Standard from 2025, which will require up to 80% lower carbon emissions for all new homes. This, the report says, will help to bring an environmental revolution to homebuilding, tackling climate change while keeping household bills low.

New homes will come equipped with gigabit-speed broadband, the government has announced today.

Digital secretary Oliver Dowden has confirmed that legislation will be passed to ensure that developers are legally required to install world-class broadband speeds.

The announcement follows chancellor Rishi Sunak’s pledge in the Budget last week to invest £5bn into rolling out full fibre broadband across the UK. 

Currently, one in five new homes are built without the connections needed for gigabit-speed broadband, but it will become a legal requirement that internet speeds of 1,000 megabit per second (Mbps) are integrated. 

Mr Dowden said: “This legislation means every new home will be built fit for the future and give people access to world-class broadband speeds from the moment they move in.

“It’s all part of our plan to deliver on our commitment to give everyone in the UK access to gigabit broadband, as we connect and level up the country.”

How Will The Plan Work?

The government will incentivise developers to follow the plan, by working with operators to secure commitments to contributing towards the cost of installing gigabyte broadband in new homes.

Virgin Media will contribute at least £500 per dwelling and up to £1,000 for larger sites, while Openreach which will supply a combined contribution with developers of £3,400. This contribution will be used to cap developers’ contribution per home at £2,000. The government expects to have agreement from other operators in the coming weeks.

The policy will ensure gigabit-capable connections are deployed in 99% of total new build homes, the government says.

Once the legislation is passed, as soon as parliamentary time permits, it will remove the need to retrospectively install broadband infrastructure and reduce disruption and high costs.

Housing Secretary Robert Jenrick said: “Today’s announcement will deliver internet speeds 200 times faster than you would need to watch an HD film on Netflix.

Why is Broadband Speed a Priority?

Having access to fast broadband is a priority shared by homeowners and aspiring homeowners alike. 

Two thirds of British homeowners prioritise access to fast broadband over living close to good nurseries and schools, it was reported last year. And the smart home boom being embraced by self builders is enabling more technology to be integrated than ever before, which is particularly important as more and more people work from home in the wake of the coronavirus outbreak. 

(MORE: Smart home solutions for every budget)

This is therefore a decision that could be received very positively by aspiring homeowners. 

“We welcome the government’s announcement that all new build homes will be required to have the infrastructure to support gigabit-capable connections, and we will work closely with the government and housebuilders on the best way to deliver this,” said Openreach chief executive Clive Selley.

Housing secretary Robert Jenrick shook up the housing sector on Thursday when he followed up Wednesday’s Budget with the announcement of a series of measures to improve homebuilding, such as speeding up the planning system, and supporting self builders in finding plots.

(MORE: Robert Jenrick announces planning reforms)

There were many measures proposed, and one that stood out was the potential extension of Permitted Development (PD) rights, so what could this mean for those building from scratch, extending or renovating a house?

The potential PD changes fall under two main strands: 

• The government will introduce new rights for building upwards on existing buildings by summer 2020
• A consultation will be held on potential PD rights to allow vacant buildings to be demolished and replaced with new homes. 

(MORE: Self Build: The Complete Guide)

Permitted Development: Extending Upwards

Regarding that first update, the new rights will enable building upwards, including extending residential blocks, by up to two storeys. The majority of projects which involve extending upwards currently require planning permission to ensure a design fits within the neighbourhood and that neighbours have no objections. 

(MORE: Building an Extension: A Beginner’s Guide)

The loosening of the rules, which was initially proposed last year, could theoretically make it easier for homeowners to expand their homes upwards, and provide greater leeway to extend.

However, there is concern that this could negatively impact communities, leading to a rise in poorly-designed buildings, with no formal route for neighbours to object.

Unfortunately, detail is as scarce now as it was last year about what this will mean for home improvers.

Sally Tagg, Managing Director at Foxley Tagg and planning expert for both Homebuilding & Renovating and NaCSBA, said: “It is possible that the expansion of PD to permit the extension of properties upwards by adding extra storeys could benefits those wishing to extend their home. However, we do not know what caveats and restrictions will be placed on this.

“Clearly the announcements are high-level in that they are light on detail at this point. And as ever the devil will be in the detail.”

Tagg added that while this could yet be a positive move for homeowners, other homeowners could be more negatively affected.

“Such an expansion has the potential to adversely affect homeowners if it permits large and unattractive extensions to a neighbour’s property, which has the potential to adversely affect one’s amenity through loss of light, loss of privacy and the creation of a sense of overbearing. As such, any new PD provision that impacts upon the opportunities for neighbours who may be adversely impacted to have their say needs to be treated with caution.”

David Renard, planning spokesman for the Local Government Association, said the government should not “take away more of the powers councils and communities need over planning”, expressing his concern about the impact of this potential change.

Replacing Vacant Buildings

The second proposal will involve a consultation into allowing empty buildings to be demolished and replaced with housing without the need for a planning application.

If this proposal gets the green light, it could theoretically lead to increased numbers of affordable homes, providing housing for those struggling to get onto the housing ladder. The only reportedly stipulation so far for these new builds is that they are well-designed new residential units which meet natural light standards. How this will be policed has yet to be revealed.

Adrian Dobson, professional services director at the Royal Institute of British Architects (RIBA) said that allowing the demolition and replacement of industrial and commercial property is a contradiction to the government’s plans to their commitment to delivering high-quality housing.

“Current rules allow developers to create housing which fails to meet even the most basic spatial, quality and environmental standards,” he said. 

“Rather than driving a green housing revolution, the government’s plans to allow the demolition and replacement of industrial and commercial property with housing under permitted development would make it easier to build the slums of the future.”

Tagg stressed that caution should be exercised before any conclusions are made as to what this will mean for the housing sector. “Again, we need to see further detail to even begin to consider the potential implications.”

Will the outcomes of this consultation prospectively affect self builders? Tagg says it’s too soon to tell, but believes opportunities will be unlikely, rather the amendments would be aimed at developers who will demolish and rebuild entire blocks.

“In order to ensure that this mechanism is not used by some to develop poor build quality and designed homes for the future there needs to be carefully worded provisions within the PD criteria. The difficulty is that there have been some poor examples of housing derived from office conversions where there are no space standards on conversions. To avoid this being repeated, careful consideration of these issues needs to be built in.

“With the caveats of the above, there may be an opportunity for group self-build and co-housing but led by enablers, again though this will be hugely dependent upon the details, but it would be a potential reuse of previously developed land and in urban settings these could be a sustainable option to bring land back into use.”

Aspiring self builders can learn all about building their own home at the Self Build Wales launch event this month, and discover how the scheme breaks down barriers that self builders face.

The Self Build Wales launch event on 21 March will enable budding self builders, as well as builders and architects, to speak to experts about the Self Build Wales scheme, its benefits, and how to apply.

Visitors will be guided through Self Build Wales’ four-step process, with a full breakdown of how building your own home will work under the scheme. 

The launch event will be held from 10:00am – 3:00pm on 21 March at Dylan Thomas Centre, Swansea. You can register for the event here.

What is Self Build Wales?

Self Build Wales is a groundbreaking scheme that provides self and custom builders with a complete package of financial support, and access to land with planning permission already granted. 

The scheme is designed to appeal to as many people as possible, including first-time buyers and growing families, and aims to provide a route for people to live in their local area, especially if they haven’t previously been able to afford to buy there. 

“We want to make self build available to many more people in Wales, not just the most privileged households,” said housing and local government minister Julie James.

Andrew Baddeley-Chappell, chief executive of the National Custom and Self Build Association (NaCSBA), said: “Self Build Wales addresses an important challenge for self builders: the ability to build when they have a limited deposit, and it adds certainty by providing plots with agreed planning permission and set prices.”

How Does Self Build Wales Work?

The core of the self build scheme is the so-called plot shop, which involves local authorities identifying plot opportunities and selling them with planning permission already in place.

The scheme is being financed by the Welsh government, with funding to be administered by the Development Bank of Wales. 

Applicants will only need to pay 25% of the cost of a plot. The remaining 75% is covered through a self build development loan issued by the Development Bank of Wales, which also covers the full cost of building the property. Repayments only need to be made once the house is completed and mortgaged.

With all the planning, decision making and, in some cases, actual building involved in bring your homebuilding vision to life, it is quite easy for self builders to forget to reclaim VAT on their new build house under HMRC’s DIY Housebuilder’s Scheme.

But if you want your self build project to be financially successful, this stage is vital.

As long as your project is eligible and you keep all the necessary receipts to submit with your claim, you could reclaim the 20% of the total project budget accounted for by VAT.

This article will explain all you need to know about reclaiming VAT — from the aspects of the project that you can reclaim on, what documentation you will need to provide and most importantly, which projects are eligible.

(MORE: The Complete Guide to Self Build)

What are the Rules When Reclaiming VAT on a New Build?

The DIY Housebuilders Scheme (Notice VAT431NB for new builds and Notice VAT431C for conversions) allows you to reclaim VAT from HMRC that you have paid out for your project if you are:

• building a new house
• converting a building into a new dwelling
• bringing an existing dwelling that has not been lived in for 10 years back in to use.

Which Projects are Eligible?

To be eligible, the project has to create a new dwelling in its own right. Extensions, refurbishments and annexes, do not create a new dwelling in their own right, and so are not eligible.

Your project must be lawful, for personal occupation by you or a family member and evidence of completion must be provided. Some planning permissions include conditions or restrictions on use or occupancy, which may mean that the project is not eligible.

If your project changes in nature during the course of works (e.g. from an extension to a demolition and new build), then to be eligible you must obtain planning permission confirming this before works continue.

For every self build, HMRC will request to see:

• valid planning permission, including your detailed plans
• evidence of completion (usually a completion certificate, habitation certificate or a valuation office listing letter)

Only one claim is allowed and all relevant documentation and invoices (which we’ll come onto) have to be submitted to HMRC within three months of your completion certificate being issued.

You will usually get the refund within 30 working days of sending in the claim.

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How Much VAT Can I Reclaim on my Self Build?

Many self builders regularly overlook this area, but you should ensure that you are charged the correct rate(s) of VAT on all costs associated with your project.

Getting this right is very important, as HMRC will not refund any VAT that has been incorrectly charged.

For new builds, conversions, and renovations that bring a dwelling that has not been lived in for 10 years back into use as a dwelling:

• The supply of materials only is always at the standard rate of VAT, which is currently 20% (5% on some energy items). You can recover all of the VAT incurred on eligible materials via the scheme
• The supply of labour only or the joint supply of labour and materials should be at the zero rate (0%) for new builds and at the reduced rate, currently 5%, for conversions and renovations that bring a dwelling that has not been lived in for 10 years back into use as a dwelling. At the end of the project, the owner can reclaim the 5% VAT on eligible joint supply of labour and materials.

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What Projects Can I Reclaim VAT On?

The type of projects you can reclaim VAT on under the DIY Housebuilders’ scheme include:

• New builds. Creating a new dwelling built from scratch, providing it is to be used by you or your relatives as a family home for residential or holiday purposes. Any existing building must be demolished to ground level. Where required by planning consent, an existing façade can be retained
• Garages for use with the new dwelling and covered by planning permission at the same time
• Conversions that create a new dwelling. Converting a non-residential building, for example, a barn, old church, business premises, into a new dwelling
• Renovations that bring a dwelling that has not been lived in for 10 years back into use as a dwelling
• If the new build or conversion is a holiday home for you and your family’s personal use
• Landscaping and outside works covered by your planning permission. This may include paving, fencing, turf and shrubs, and so on.

Which Materials Can I Claim VAT Back On?

Examples of the materials you can claim VAT back under the DIY Housebuilders’ scheme:

• All materials normally incorporated in a new dwelling — all construction materials, for example, concrete, blocks, bricks, insulation, sand, cement, plaster, timber, roofing, stairs, windows, guttering, doors, paint, etc
• Electrical and plumbing materials
• Fitted furniture such as kitchen units and worktops   
• Extractor fans
• Fittings, such as light fittings, wooden floor systems, linoleum, floor tiles, door furniture, fireplaces and fires, fixed towel rails, mirrors, solar panels, boilers, sewage treatment plants, TV aerials, curtain poles
• Swimming pools and saunas inside or linked to the new dwelling
• Delivery charge included on an invoice for materials

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Getting Advice on Reclaiming VAT on a New Build

Many tradespeople and contractors are not experienced in dealing with the VAT rules on new builds and eligible conversions.

They sometimes say: ‘it doesn’t matter now, as you will get the VAT back at the end anyway’.

However, this is not true. Don’t leave it to the contractor.

If you are unsure of any aspect of VAT on your project, engage the services of a professional to help you get it right.

Special Circumstances

• Renovations to dwellings empty for two years or more are eligible for the reduced rate of VAT of 5% via a VAT-registered contractor
• Works involving a net change in the number of dwelling units are also eligible for the reduced rate of VAT of 5%. Examples include converting two cottages into one house or reverting three flats back into a house
• Some adaptations work to alter a house for someone who is disabled is zero rated for VAT.

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The Importance of Valid VAT Invoices

Ensure you retain all valid VAT invoices, as the originals must be submitted to HMRC with your claim.

Electronic payment receipts and emails confirming orders are not valid VAT invoices and so any VAT paid is potentially lost.

Invoices should include:

• the supplier name
• their VAT number
• the invoice date
• a description of the goods supplied (and services if applicable)
• the value of the invoice

If one of your tradespeople/contractors uses their trade account to source your materials and so is in their name, ensure that you pay the supplier direct and keep the evidence, as it will be required.

The VAT incurred on invoices from VAT-registered suppliers in the EU can be claimed too, as long as the invoice includes the relevant information (including their VAT number).

Many purchases are made online these days, so ensure that you obtain a valid VAT invoice when buying, as this may prove difficult to obtain at a later date.

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About the Author

Andrew McDonald (MAAT FCCA) is a qualified accountant who has built his own house.

He prepares and submits VAT claims for domestic clients and assists clients who require VAT advice throughout their project.

He also deals with HMRC reviews and appeals, and tribunal cases following rejected VAT claims.