Monday, 3 August 2009

Conflcting priorities

It's struck me for some time that the drive to provide more affordable homes, particularly for young people trying to get onto the housing ladder, is at odds with the drive to build low-carbon homes. Both are very worthy aims, and governments are right to seek to do both, but I'm not convinced that they've entirely worked out as yet how to achieve both aims.

"Affordable Homes" is unquestionably a major issue in this part of the world. Carmarthenshire and Pembrokeshire are attractive places for people to live, and people selling up in the major cities in England can often afford to 'outbid' local people. Coupled with a quite tight control over planning – particularly in the National Park – the result can be that housing becomes both scarce and expensive when compared to the needs of local people.

Meeting targets for reduction of emissions of greenhouse gases is not something which should be optional, and a target of ensuring the new homes are carbon-neutral is the sort of radical step which we need to be taking. But there seems to be little doubt that, in the short term at least, and probably in the longer term as well, meeting the necessary standards is likely to lead to increased building costs.

So the objectives are in conflict, and I just don't see, at present, that enough is being done to enable the achievement of both. This story in yesterday's Sunday Times suggests one way around the dilemma – it seems some developers are thinking in terms of ignoring the rules, and simply paying the fines for non-compliance, seeking that as a cheaper alternative for them.

That can hardly be a sensible outcome for government policy; but it underlines the fact that merely turning entirely worthy aspirations into planning regulations is never going to be enough.

The problem is, at heart, a financial one. Owners of low- or no-carbon housing will have to pay more for the homes, but will then pay less to run them as their energy bills will be so much lower. Are the financial institutions geared up to take this into account when deciding how large a mortgage to give? Traditional income ratios presumably implicitly assume a level of running costs which should no longer be correct.

Are the government willing – or even able given current financial constraints – to make additional finance available for eco-friendly homes? That doesn't have to be in the form of grants – a differential form of council tax, or some other form of tax incentive might be a part of any solution. More part-ownership schemes would be another; but still require finance to be available from somewhere at the outset.

Perhaps we should even be looking at different types of house purchase - setting the price on the basis of 'lifetime cost' for instance, which would have the effect of making eco-friendly homes financially more attractive than current conventional housing.

Whatever solutions are adopted, failure to deal with the financial question will become a failure to deliver on either aspiration.

3 comments:

Al Iguana said...

..or how about: give local people priority over current housing stock?

John Dixon said...

Al,

Of course, and that helps to deal with the distorted market caused by the ability of people moving in to push prices up. But it doesn't begin to deal with the increase in building costs resulting from higher environmental standards.

Spirit of BME said...

Was there not a political party in Wales ,claiming to be socialist that wanted to give 1st time buyers a £100 to get on the ladder?
This is a formula for creating sub prime ,I don`t think these politicians have apologised for the misery they have created.
Come Liberation ,there is a solution as we saw in Ireland and the Baltic states- all empty houses bought under English law will be null and void - as the rat on in the ad says "simples".