Legal requirements to install solar panels on the roofs of new properties by 2027 is already impacting the financial viability of housing schemes, property consultancy Fisher German has warned.
The consultancy found that the UK government’s announcement around rooftop solar panels becoming a “default” feature on new build homes under the upcoming Future Homes Standard (FHS) is already affecting the market, with the firm predicting that the delivery of affordable housing could be hit hardest.
This comes just weeks after the government announced the policy, which mandates that new homes must include solar photovoltaic (PV) panels covering at least 40% of the roof area, with allowances for practical limitations such as shading or orientation.
Luke Brafield, partner and head of residential development at Fisher German, said that whilst the government’s agenda is to deliver more housing, with a particular focus on affordable homes, measures like the FHS are already countering this.
He added: “Embedding solar into the DNA of new housing developments is not just about reducing emissions, it’s about creating homes that are future-proof, resilient, and affordable to run.
“However, while the ambition behind the FHS is commendable, we’re seeing the requirements increasingly treated as a cost rather than a value-add in the market.
“The cost for FHS enhancements currently sit at around £5,000 to £10,000 per dwelling, however the majority of house purchasers are not valuing the benefit of these so are not willing to pay any additional costs, house builders are not factoring this into their land appraisals to purchase land as a result.
“This means that it is a cost to the land value and is impacting the financial viability of schemes, and it is something we are already seeing in several transactions we’re involved in.”
The FHS, set to be released this autumn, will also include enhanced energy efficiency standards, improved ventilation, and smart technologies to optimise energy use, and marks a significant shift in building regulations.
Brafield added: “Whilst the government has ambitious housing targets to meet, they are also introducing measures such as the FHS which is countering the delivery of the homes, particularly in lower value locations.
“It is something that will likely impact the delivery of affordable homes the most. The government is targeting investment in the delivery of lower value tenures; however increased costs hit their viability hardest.
“This is before factoring in management and maintenance, which will be a key consideration for both house builders and homeowners.
“When the FHS is officially published this August, is will be key that the policy supports, rather than disrupts, housing delivery.”