Across the globe, lots of measures are being introduced with the goal of achieving net zero.
Scotland’s latest step in these efforts is the introduction of the New Build Heat Standard, with the new building regulations scheduled to come into effect in April 2024.
What is the New Build Heat Standard?
The New Build Heat Standard is a comprehensive set of regulations designed to limit the use of direct emission heating systems in new buildings. That means no more gas and oil boilers, which produce higher greenhouse gas emissions. The standard will require new buildings to adopt clean zero emission heating systems, such as heat pumps, solar thermal storage systems, electric storage heaters, and other systems connected to a heat network that meets the zero emission criteria. The majority of new builds still do not use these type of systems.
There are a few exceptions to the New Build Heat Standard, such as buildings constructed before 2023 that are turned into new homes whether by alteration and/or extension. Other exceptions only apply to commercial buildings as they relate to emergency heating in case of system failure or heating solely for frost protection or equipment preservation.
Why introduce a New Build Heat Standard?
The Scottish Government has set itself a target to reduce emissions by 75% by 2030 and achieve net zero emissions by 2045. Approximately one-fifth of Scotland's total greenhouse gas emissions come from domestic heating, so the New Build Head Standard is a key part of meeting these aims.
The government's strategy includes implementing improved energy efficiency requirements in building regulations, energy efficiency standards for existing homes, and the promotion of heat networks.
When will the new regulations come into effect?
The new standard will apply to all building warrants applied for from 1 April 2024 onwards. Any new homes built under existing warrants (which are valid for three years plus any extension) do not need to meet the standard. This means the full impact of the standard is still a few years away.
Is it achievable?
Although there is support for the measures, there are also concerns – such as grid capacity. Can the infrastructure cope with the increased electrification of heating systems? There are also worries about the supply chain and the availability of skilled workers needed to install and maintain zero direct emission heating systems.
Cost is also an issue. The Scottish Government estimates that the cost difference between a heat pump and a gas boiler could be around £8,400. During a cost-of-living crisis and with mortgage rates still high, there are question marks around whether these extra costs can be passed onto customers and any knock-on impact on housing supply. Like most new tech, these systems will become less expensive over time.
Impact on housebuilders
There is no doubt that cleaning up heating systems introduces various challenges for housebuilders. As well as the obvious costs, there will be other impacts on developments coming through the pipeline. The appraisal of those in the medium to longer term will require adjustment considering the additional cost of the new regulatory landscape. This will impact the residual land value and the price housebuilders are able to pay for the land. We can expect higher prices for house purchasers and re-evaluations around the commercial viability of some sites.
New regulation is rarely embraced from the outset, but the New Build Heat Standard will be enforced by government in return for the promise of a cleaner, greener homes. That change – while positive – does comes at a cost.
The government needs to consider carefully what will represent best value for money when introducing changes as part of the climate change objective. Introducing further regulation on the new build sector to achieve relatively modest energy efficiency gains at a cost should be measured against the potentially much larger gains that could be readily achieved from improvements which could be made to existing housing stock.
Written by
Related News, Insights & Events
Court of Session rules on Rosebank and Jackdaw consents
The Outer House of the Court of Session has taken a notable decision on both the consent for the Rosebank oil and gas field and the consent for the Jackdaw gas field.
Building safety in Scotland: Legislation comes into force on 6 January 2025
The Act was introduced by the Scottish Government to reduce the risk to life from unsafe cladding on high-rise homes.
Letters of Intent in construction projects: Practical insights
Letters of intent (LOI) are widely used in the construction industry. Here we explore what LOIs are, their role in the industry and how they can be used effectively.
