Real Estate Blog: Is your future home up to standard?

The Future Homes Standard (FHS) is a government regulatory framework aimed at improving the sustainability of new homes. A consultation is ongoing this year to allow for comments on the latest draft. The government is expected to implement the FHS regulations in 2025, meaning it will become mandatory for new homes to be built in accordance with the FHS.  The landscape of the housebuilding sector, therefore, is set to be transformed in the coming year and it is vital that housebuilders/developers are prepared for these changes.  This article sets out the key aims of the FHS and discusses the potential implications for housebuilders/developers.

Key aims under the FHS

1.    Net Zero Homes 

The FHS requires that all new homes built from 2025 produce at least 75%-80% less in carbon emissions compared to homes constructed under the old regulations. New homes will also need to be ‘net zero ready’, meaning that they will need to be designed and constructed to be ready for net zero carbon emissions (in line with the commitment to achieve net zero by 2050), without requiring additional retrofit measures or technology in the future. 

2.    Improved energy efficiency

To help achieve the aims of the FHS, the FHS will require all new homes to:

•    incorporate low carbon heating systems and shift away from traditional gas boilers; 
•    use improved building fabric which enhances the thermal performance of walls, roofs and floors so homes can retain heat more effectively; and
•    consider using triple-glazed windows to provide better insulation, minimise heat loss and reduce reliance on heating systems powered by fossil fuels.

3.    Changes to existing Building Regulations

To help developers/housebuilders get ready for the changes under the FHS, the government introduced interim changes to the current Building Regulations which have applied to new homes built since 2022. The changes to Part L (Energy and Carbon Emissions) of the Building Regulations were introduced to bring higher efficiency standards by requiring a reduction of at least 31% in energy use and carbon emissions compared to the old regulations. The changes to Part F (Ventilation) of the Building Regulations imposed new standards for enhancing the indoor air quality and proper ventilation of homes. 

Implications for housebuilders/developers

1.    Costs

The FHS will have cost implications for housebuilders/developers. For instance, low carbon heating systems such as heat pumps are at present considerably more expensive than traditional gas boilers. The changes under the FHS are therefore likely to increase build costs, which may then impact profitability margins, increase house prices or reduce land values (or a combination of all three). House prices continues to be a hot topic and are likely to come under increased scrutiny during the upcoming election. For our not-for-profit RP clients, the impact may simply be having less money to build more affordable housing.

2.    Knowledge

Housebuilders/developers will need to invest time and money in training to ensure they have the necessary skills and understanding to comply with the evolving standards. There will also need to be greater emphasis on understanding the low-carbon technologies and sustainable materials available, coupled with a need to educate buyers about the benefits in order to drive demand. 

The significant changes in the FHS, set to be implemented next year, mean housebuilders/developers must prepare for the transition by improving supply chains, skills, and construction practices. If you require any advice of the impact and effect of the FHS, then please contact one of the Housebuilding & Strategic Land team.