To provide information to the Environment and Sustainability Scrutiny Committee on Carbon Neutral Housing. The report details whether new houses and self-build properties are ‘zero carbon ready’ and looks at the role of fuel replacement to heat homes.

The Chair took the report on Carbon Neutral Housing as read and opened the item up for debate. The key points of discussion included:

1. Members were advised that the Future Homes Standard was expected to become legally enforceable from December 2027, requiring new homes to be net zero ready, predominantly electric and removed from the gas grid.

2. Officers confirmed that while carbon neutral homes had higher upfront installation costs, particularly for heat pumps and insulation, running costs could broadly balance out where homes are well insulated.

3. It was reported that industry awareness of the Future Homes Standard was increasing, although readiness to deliver at scale remained mixed, with larger developers better placed than smaller builders.

4. Officers confirmed significant and ongoing skills shortages across key construction trades, with limited training capacity and a risk that locally trained workers may leave the area.

5. Members were advised that housing delivery was developer-led, with most construction labour subcontracted, limiting incentives for developers to invest directly in workforce training.

6. Officers advised that the Future Homes Standard would add cost and complexity to housing delivery and could place additional pressure on housing numbers alongside existing viability challenges.

7. It was confirmed that all new housing, including affordable and social housing, would be required to meet the same standards, as well as the required percentages for such housing laid down in the Local Plan.

8. Officers advised that while low-density development was less efficient, it remained necessary to meet housing needs, and that higher-density development may improve efficiency where appropriate.

9. Members were advised that accommodation for construction workers was already constrained and was being considered as part of Local Plan development.

10. Officers confirmed that heat networks were uncommon in domestic settings due to cost and management challenges and that new homes were expected to be fully electrified.

11. It was confirmed that electricity grid capacity was a significant challenge and that the council was working with the Distribution Network Operator to inform future investment planning.

12. Officers advised that retrofitting of existing homes was unlikely to be mandated, with current support focused on voluntary grant schemes such as Warm Homes.

13. Members were advised that while planning policy could be prepared in advance, development management and building control services would face increased pressures once the standard became statutory.

14. Officers confirmed that no specific mortgage or finance products recognising lower running costs were identified, although this was noted as an area for potential future exploration.

At the conclusion of the debate the committee discussed and agreed the following recommendations to the Executive.

That:

1. The Executive should commission a piece of work in collaboration with housebuilders (including housing associations) to quantify the impact of implementation of the Future Homes Standard on the achievability of the new housing target for the County of 27,260. This should include the future availability of new affordable and social housing.
2. The Executive should continue discussions with relevant industry partners to evaluate the skills required to deliver the Future Homes Standard in the County and how this will feed into a joined-up approach by the Council including colleges, the youth employment hub and those involved in career advice.
3. The Executive should implement a review of the Council’s policy and operational readiness and preparedness of planning and building control to ensure they are fit for purpose for when the Future Homes Standard finally comes into force, including training requirements.
4. The Executive undertake a review/audit of the government support being put in place to assist the market to deliver the quantum of carbon neutral homes
5. In the development of the Local Plan ‘building control standards’ are reviewed to ensure they are aligned with the Future Homes Standard and provide viable and affordable compliance with the development of ‘carbon neutral’ homes
6. The Local Plan – through building control policies ensures that every new home built is fitted with solar paneling and/or renewable heat sources to reduce the pressure on the national grid
7. The Executive encourages government and other stakeholders to investigate and consider options that allow a more balanced approach to the financial products available for home buyers to allow for downstream energy cost savings to provide more attractive purchase options for carbon neutral homes for those who have income but lower equity.