Several times a year, we bring our commercial clients together at our Developer Breakfast Workshops to look at a critical issue affecting the property development sector.
In November, we looked at the recent updates to the B Regs, which significantly impact most of their businesses.
Here’s a quick summary of the fundamental changes to the B Regs for those unable to join us.
Part F – Ventilation
Part F covers building ventilation and supports changes to Part L. The goal is to ensure properties offer a high degree of air tightness and use technologies such as mechanical ventilation with heat recovery or traditional low and naturally ventilated methods.
Ventilation is important because it’s required to provide a healthy living environment. It also helps prevent heat loss or heat gain and therefore reduces emissions.
Part L – Conservation of Fuel and Power
Part L is about reducing CO2 emissions through higher standards of insulation, more efficient heating systems and setting a maximum energy use for new buildings.
The new B Regs should achieve a 30% improvement in performance for most buildings, which is vital for our fight against climate change.
Part O – Overheating
Overheating is a significant challenge for energy and building performance. If you have a building with lots of glazing, it likely gets hot in the summer months and too cold in the winter. The result is high heating or cooling costs using technologies that are energy hungry.
The new B Regs aim to limit unwanted solar gains and ensure heat removal from an indoor environment. Compliance with the new Part O requires simplified or dynamic modelling of overheating in a building.
Part S – Infrastructure for Charging Electric Vehicles (EVs)
New residential projects with car parking are required to install infrastructure for EV charging. This move is essential as the country transitions away from petrol and diesel cars, the sale of which will end in 2030.
What Are the Key Challenges for Property Developers?
In themselves, these updates to the B Regs sound manageable. However, there are some significant challenges to consider.
Is your Council’s Planning Policy Aligned?
What happens when your local Council’s planning policy regarding energy use does not align with the B Regs?
If you work across boroughs or in different regions, it’s worth knowing that local policies may differ, so you will need to get to grips with many additional requirements.
I Already Have Planning Consent
It is now possible to gain planning permission for a scheme you can’t build in compliance with the B Regs. How will that work with your current or future projects?
What About Extra Costs?
There are several obvious cost implications during planning, which increase your risk money, and construction.
Let’s kick off with the energy assessments required to model overheating in line with Part O. This will require an energy assessor, so another consultant in your design team with associated fees.
Next, you may have additional design costs with your architects as new buildings will almost certainly need a 3D model using BIM. You will also need to be careful to preserve the building design while complying with energy modelling, which may require more design time.
Remember the London Plan Urban Greening Factor for those in London. This policy aims to ensure significant developments provide sufficient greenery, assisting with flood risk reduction, urban heat islands and delivering an increased connection with nature.
Greenery refers to various surface cover and runs, from woodland and wetland to permeable paving.
Each local authority can set its minimum standards for the greening factor, so make sure you don’t get caught out, and remember to build this into your deal analysis.
The extra costs don’t stop there. When it comes to construction, remember to consider the additional insulation costs required to meet thermal performance.
What about the extra wall thicknesses that will inevitably reduce the total GIAs? This loss of space may mean reducing your room sizes or losing a unit or two. How will this impact your GDV?
What Does all this Mean for Developers?
Let’s start with site acquisition.
It means doing further due diligence if you are buying sites with planning. What happens if the consented scheme does not meet B Regs? The best-case scenario is there are planning amendments required. Worst case? You must go back into planning, adding costly delays and risks.
The additional costs before planning also add to your risk money, as you must spend before getting planning consent. There is also a risk of abortive work if you don’t consider B Regs at the appropriate stage in the design process.
The planning process will require more time with extra consultants, such as energy assessors. Will this slow the process, and do you have a reliable energy assessor in your team?
What about post-planning?
There is now much more responsibility for ensuring your building goes up as designed. You must provide evidence to the local building or approved inspector that work is being carried out per the design and meets the new standards.
You should expect your contractors to provide photographic evidence at every stage.
It’s Not all Doom and Gloom.
The constraints enforced by the new B Regs are also opportunities to deliver a higher-quality product, which may suit some strategies.
The increased onus on your contractor to deliver build quality suggests you should have fewer post-sale issues, so fewer snagging problems and costs.
More efficient buildings will reduce operating expenses and improve your bottom line for build-to-rent models.
And finally, there are signs that lenders are offering preferential rates for commercial schemes that achieve higher carbon reduction levels.
The mood at our Developer Breakfast Workshop was that the changes to the B Regs are a positive move for achieving carbon neutrality.
However, as with all things in construction, you need to plan to avoid big problems later down the line. Getting quality advice at the right stage is more crucial than ever.
Thanks to all those that attended our workshop. We are organising our next workshop for March, and we will be in touch when we have more details. You can also register your interest in attending by contacting our team here.
The Workshops are designed to bring property developers together to learn about and explore recent changes and case studies and to build your networks. You can see a handful of photos of our workshop from November about understanding the new building regulations below:
Please also contact us if you want help understanding the new Building Regulations or want to stay up to date with energy-efficient building design.