Month: March 2020

The 2020 Spring Budget will be delivered on 11 March by new chancellor Rishi Sunak, and the ubiquitous question within the homebuilding industry is: what measures, if any, are going to be introduced for self builders (including those who custom build) and those planning on renovating a house?

The Conservative Party was the only major political party to reference self build within its 2019 General Election manifesto. Specifically, it promised to help first-time self builders access the Help to Buy scheme using 5% deposit mortgages. The manifesto also promised to: “support community housing by helping people who want to build their own homes find plots of land”.

The details behind the pledges were sparse, so all eyes will be on the Spring Budget reveal to see whether these will be fleshed out. Following the appointment of Christopher Pincher as housing minister last month, it will be interesting to observe whether his influence is reflected in the report. 

Homebuilding & Renovating spoke with industry experts as to what they want to see in the Spring Budget 2020, and what needs to change for self builders and renovators.

Making it Easier For Aspiring Homebuilders

Andrew Baddeley-Chappell, chief executive of the National Custom and Self Build Association (NaCSBA), says one of the key announcements that they are waiting for relates to Help to Buy equity loan, and the opening up of the custom and self build market to those with smaller deposits, seven years after the scheme was first unveiled.

This is one of a number of early measures from Government that is needed, NaCSBA says. These include challenging the dirty tricks of local authorities regarding the Right to Build registers, which provide evidence to local authorities about how many people want to build or commission their own home locally.

NaCSBA recently reported unacceptable practices from some local authorities, such as charging excessive fees to join registers and denying those living outside an authority the opportunity to build a home there, whilst no such constraints applied to the purchase of homes built by builders.

Baddeley-Chappell told Homebuilding & Renovating: “We were extremely pleased to see that the Conservative Party manifesto contained clear commitments to provide greater support for the growth of our sector. And our view has always been that the sooner that support arrives the sooner the benefit will flow through. The Budget is the obvious first date for that support to start be made clear.”

NaCSBA has proposed the introduction of a Help to Build equity loan scheme for self builders which would address the lack of access to the current scheme. Noting that Help to Buy, in its current form, is unfit for custom and self build because it relies on a single payment to the builder on the completion of the purchase of a property, whereas self build typically involves multiple payments to different parties, not least for land and construction.

Baddeley-Chappell wants to see a package of other measures introduced to make the homebuilding process easier for self builders.

“Action is urgently required to address the Right to Build legislation that is currently resulting in a minority of local authorities undertaking dirty tricks to deny the opportunity for people to build their own home.

“We’d like to see active work from Homes England to bring about more plots for custom and self build, in particular in areas in the north where land prices make developers more reluctant to develop, but houses more affordable to self build.

“More technical changes are also required to the taxation regime to end some unintended differences that favour speculative new build over a self and custom build approach.”

Affordable Homes and VAT Concerns

The Conservatives pledged to build a million new homes over the lifetime of the parliament, yet with the delivery of affordable homes stagnating in recent years, and the government’s proposed First Homes scheme drawing criticism that it may actually prevent affordable homes being built, there is concern as to how the government plans to meet its target. 

Brian Berry, chief executive of the Federation of Master Builders (FMB), told Homebuilding & Renovating: “It’s really good news that the government has pledged a million new homes over the lifetime of the parliament, but our concern is about who’s actually going to build them – particularly as a lot of small and medium-sized housebuilders have been driven out of the market – so we’re looking to see a more diverse housing market to build the homes that are needed.

“Also, because we need greater choice in the housing market, we need to think about people wanting to build their own homes, and the rise of modular homes. There ought to be some form of financial help, such as an extension of the Help to Buy, to those who want to build their own home.”

VAT Changes to Benefit Renovators

The FMB also wants to see changes to VAT on repair and maintenance work, which could have a transformative effect on renovators. “Cutting VAT on repair and maintenance work would be significant,” said Berry. “It’s 20% at the moment so getting that down to 10-5%, ideally, would be a great boost for small builders, and also helping to improve the quality of our building stock.” 

Additionally, the FMB has called for increased commitment to reducing carbon emissions within the housebuilding industry. “Given that 40% of carbon emissions come from our building stock, the government will need to make sure that existing buildings are upgraded, so that means having some sort of national retrofit energy efficiency upgrade strategy, with some incentives for the government to encourage that to happen.”

Homebuilding & Renovating will be staying on top of developments with the Spring Budget and report on what the outcomes mean for self builders and renovators

Around two thirds of homes in the UK do not meet long-term efficiency targets, according to a new review. But experts say that retrofitting homes could help to meet these standards.

The BBC’s Shared Data Unit has revealed that more than 12 million homes fall below an Energy Performance Certificate (EPC) grade of C. The EPC, introduced in 2007, grades houses from A-G based on how energy efficient they are. 

These energy efficiency grades measure how well a property is glazed and insulated, and whether it uses renewable energy or low-carbon heating systems to reduce energy use. 

More than 19.6 million homes across the UK had their grades analysed, and those rated below a C grade are more likely to have higher energy use and running costs. It also means homeowners are introducing more carbon dioxide into the atmosphere than necessary. 

These findings are disappointing for the government on two fronts. It has pledged targets for net zero greenhouse gas emissions by 2050, and it has also targeted upgrading as many homes as possible to grade C by 2035. 

How Retrofitting Homes Could Help

Experts say that a deep retrofit – which is a whole-house approach to improving energy efficiency – could help to make more existing homes meet efficiency standards. Retrofitting homes built before 1990 could be particularly important because these homes have been reported to be four times more likely to require repairs.

“There are 29 million homes, all of those need to retrofit energy efficiency measures and better forms of heating, and as we are looking to achieve this by 2050, that implies upgrading a million homes a year, but the current rate is 10 times less than that,” said Jenny Hill, team leader for buildings and international action, Committee on Climate Change.

A report published in January called the government to reduce VAT to 5% for renovators looking to retrofit their homes, and this could go a long way towards making changes. 

The government will invest more than £6m towards these improvements. It is also exploring how to halve the cost of retrofitting properties, and investing over £320m into helping heat homes with lower carbon alternatives, such as introducing hydrogen into the gas network, and heat pumps.

The Benefits of Energy Efficiency

When renovating a house, those who upgrade their home’s energy rating can increase its value by £25,000 according to new research. This can be achieved by measures such as: installing insulation, upgrading your boiler, and replacing light bulbs with energy efficient LED versions.

Self builders and custom builders who design and build their own homes have the opportunity to make their homes more energy efficient from the outset. This can lead to lower long-term energy costs and less carbon dioxide being released into the atmosphere. 

(MORE: Self Build: The Ultimate Beginner’s Guide)

The Self Build Wales scheme has officially launched this week, in a bid to remove the barriers facing self build and custom build.

Self Build Wales is a £210m scheme that will help aspiring homeowners with funding to build their own home. Whether you’re a first-time buyer or looking for a bigger home for your family, Self Build Wales is designed to appeal to as many people as possible.

(MORE: Self Build: The Complete Guide)

The groundbreaking scheme is reported by the Welsh government to be the first of its kind on the basis that it provides a complete package of financial support, access to land, and planning permission.

How Does Self Build Wales Work?

The core of the scheme is the so-called plot shop, which involves local authorities such as Swansea Council – which trialled the scheme last year – identifying plot opportunities and selling them with planning permission already in place.

(MORE: Finding a Plot)

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

Applicants only need to pay 25% of the cost of a plot, and no repayments need to be made on the loan until the house is completed and mortgaged.

In the event of multiple applications being made for plots, each application will be reviewed by the relevant local authority based on its priorities for the area. 

Andrew Baddeley-Chappell, chief executive of the National Custom and Self-Build Association (NaCSBA), told Homebuilding & Renovating: “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.

“We very much hope that it will be a springboard for self building in Wales and that we’ll see a number of wonderful additional homes as a result.” 

What are the Benefits of Self Build Wales?

Not only does the scheme make it easier for people to build their own home, but it provides a route for people to live in their local area who haven’t previously been able to afford to buy there.

Moreover, older and disabled people are afforded the opportunity to custom build a home that meets their health requirements.

Hannah Blythyn, deputy minister for housing, launched the scheme this week. She said: “We know finding the land, navigating planning consents and being able to afford to self build while covering the cost of living can be real barriers. Self Build Wales removes these barriers, and makes it far easier for people to build their own home. It will also be a significant boost to building firms across Wales.

“While we are investing significantly in building new social and affordable homes, we also want to help far more people who want to build their own homes – doing so should not be the preserve of the most privileged households.”

Self Build Wales is also expected to help Welsh small and medium-sized (SME) house builders. 

Air source heat pumps have been in the spotlight in recent months, after the government announced that it was banning the installation of gas boilers in new builds from 2025. The renewable technology has been heralded as a viable alternative.

What’s more, while the Feed-in Tariff scheme is no longer offered to homeowners installing solar panels and other electricity-generating renewable technologies, the Renewable Heat Incentive (RHI) scheme is still alive and well.

Under the RHI scheme, those with renewable heating technologies are paid back for the heat they generate for seven years — a real bonus for those considering investing in the technology.

Other benefits include the comparatively low running costs and the fact that air source heat pumps work well with underfloor heating.

However, air source heat pumps are not a ‘one-size-fits-all’ solution and may not be suitable for every home. 

It is essential to design and specify the system correctly and ideally the insulation, airtightness and emitters (typically underfloor heating) of the property should be optimised, to allow you to get the most out of your air source heat pump.

What is an Air Source Heat Pump?

Although an air source heat pump replaces a boiler as the home’s heat source, the way it works is very different:

• An air source heat pump does not create heat. It simply moves it from one place to another through the vapour compression cycle (or refrigeration process) to make it more useable. Heat from the air gets absorbed into a fluid, which is then compressed, raising its temperature. The higher temperature is then transferred into the heating system
• Electricity is needed to power the pump. The efficiency, or the measure of the heat energy output per kW of electricity, is stated as the SCOP (Seasonal Coefficient of Performance). For example, a SCOP of 3.2 means that for every 1kW of electricity, 3.2kW is generated
• The air source heat pump gets its energy from the surrounding air, so as the air temperature drops, so does the efficiency. The bigger the difference between the outside air and the target temperature (either the indoor room temperature or domestic hot water), the lower the efficiency. It is therefore key to understand the heat load of the property and the performance characteristics of the heat pump
• For space heating, air source heat pumps work best with underfloor heating, but low-flow temperature radiators will work as well.

How Much Does an Air Source Heat Pump Cost?

Expect to pay around £11,000 for a good quality system (including installation); the air source heat pump can cost upwards of £7,000.

How do Air Source Heat Pumps Compare with Ground Source Heat Pumps?

There are a number of key differences:

• The efficiency: SCOP (Seasonal Coefficient of Performance) is the measure of efficiency. A typical SCOP figure for an air source heat pump might be 3.2; the comparable figure for ground source heat pumps is more like 4, so for every 1kW of electricity, 4kW is generated. Thus ground source heat pumps are slightly more efficient
• The installation: Ground source heat pumps require a large garden or piece of land to be installed, or are installed in deep boreholes. Both types of installation result in excavation costs. Air source heat pumps are not installed in this way. Instead the external condenser unit sits in a box on the outside wall and so is cheaper to install
• The incentives: The Renewable Heat Incentive offers a more generous return for owners of domestic ground source heat pumps — 20.89p as compared with 10.71p for domestic air source heat pumps.

Can an Air Source Heat Pump Provide Both Heating and Hot Water?

One of the first decisions to make when buying an air source heat pump is whether it will provide space heating or domestic hot water — or both.

The key here is that the ‘flow temperature’ (the temperature of the water in the heating system) is different:

• Space heating will usually require a flow temperature of around 35°C to 45°C for underfloor heating or low-temperature radiators
• Domestic hot water will, however, require a minimum flow temperature of 55°C.

On new homes that meet recent and current Building Regulations most air source heat pumps can do both, but this is not always the case.

Using Two Heat Pumps

Another solution is to use two heat pumps: one that is optimised for the space heating and another for domestic hot water.

The advantages of using the two heat pumps is that each unit is optimised for the required flow temperature and there is no priority system that causes the space heating circuit to ‘cool’ while the domestic hot water is being reheated.

The domestic hot water heat pump typically uses a different refrigerant that can produce higher flow temperatures but also requires a higher source temperature (above 4°C) to be efficient.

It tends to be lot smaller than a space heating heat pump and is usually built into the hot water cylinder. It draws its air either from the room it is in or from the exhaust waste heat of a ducted mechanical ventilation system —and is known as an ‘exhaust heat pump’ or a ‘micro heat pump’.

Examples include:

Higher Temperature Heat Pumps

In order to achieve higher temperatures, some manufacturers have built the two different refrigerant systems into one heat pump in a ‘cascade’ system that can create flow temperatures of up to 80°C.

These systems (such as the Daikin Altherma) are designed for hot water and should not be used as a high temperature boiler replacement unless the lower efficiency has been carefully calculated to ensure that it is the best option for the property.

There are also other new technological advances that are worth noting such as compressors that allow the compressed vapour to be re-injected into the compressor to enhance the temperature. These systems can get flow temperatures of around 65°C.

The advantage of this system is that it reduces the complexity of the heat pump and therefore the cost. The operating pressures put a larger load on the compressor and push the tolerance of the refrigerant — examples include the Dimplex A-class air source heat pump and Mitsubishi Electric Ecodan.

Choosing Smart Controls for Your Air Source Heat Pump

Modern air source heat pump heating systems require specialist design and commissioning to achieve and maintain efficiency. In the age of the ‘app’ and smart heating controls, these systems can easily be tampered with, resulting in lower efficiency and high running costs.

As a result, some manufacturers have developed controls that can be monitored and maintained remotely. This is especially useful in second homes and rental properties, as well as for technophobes, as the systems can be reset and adjusted without someone coming out to the property.

In the event of a breakdown, the system can be checked, faults diagnosed and the correct spares sourced before incurring the expense of going to site. The engineering accessibility is often an after-sales add-on product, so check costs and requirements before ordering.

In the absence of full remote control and monitoring, it is worth finding a controller that stores the operating data on a memory card so that it can be accessed for analysis and perhaps new settings emailed to you for upload.

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About the Authors: David Hilton and Tim Pullen

David Hilton is an expert in sustainable building and energy efficiency and is a director of Heat and Energy Ltd.

With thanks to Tim Pullen. Tim Pullen is Homebuilding and Renovating’s expert in sustainable building and energy efficiency. He is the author of Simply Sustainable Homes.