HCR Law Events

27 August 2021

Welsh Government pledge £250m to build low carbon social housing


The Welsh Government has promised to build 20,000 new low-carbon social homes for rent and has committed £250m to the programme. The ambitious plans are designed to address the rising demand for social housing, whilst helping to tackle the climate crisis.

Using what are described as “bold, new quality and environmental standards”, low carbon homes are designed to maintain comfortable temperatures with minimal energy usage. It has been suggested that such homes could even become miniature power stations by generating more power than they need and exporting energy to the national grid.

A recent development of 14 homes undertaken by a housing association in Bridgend, built to new environmental standards, has made use of technical innovations, including photovoltaic roof systems that store energy in Tesla batteries. Using mechanical ventilation integrated with exhaust air heat pumps, the residents have suggested that the homes are able to function without heating even on cold days. Julie James, the Minister for Climate Change, who is responsible for housing, has described the development as an “exemplar” for housing associations to follow.

The policy to deliver greener social housing is driven partly by the government’s legally binding target of reaching net zero by 2050.

The Welsh Government’s commitment to investing a quarter of a billion pound in eco-efficient social housing is expected to have wide reaching benefits.

Environmentally friendly social housing has already positively impacted tenants, who have found themselves receiving money back on their energy bills.

As well as helping to combat climate change, it is hoped that the construction of new social housing will help to redress issues such as homelessness and the second-home crisis.

The policy is also expected to create 7,000 jobs, 3,000 training opportunities and help produce £2bn of economic output for Wales over the next five years.

Housing associations are undoubtedly becoming more aware of the Welsh Government’s requirement for them to decarbonise.

The conditions attached to grant funding provided by the Welsh Government to housing associations for the purposes of constructing new social housing will now often stipulate that such funds are to be used for the purposes of “zero-carbon development”.

In order to achieve its policy goals, when disposing of land to such associations, the Welsh Government has recently looked to include covenants and overage provisions relating specifically to the development “zero-carbon” homes.

However, there is no industry recognised definition or consensus on what constitutes a “zero-carbon development”.

Consequently, the wording contained in contract documents relating to such developments need to be carefully negotiated, in order to ensure that housing association clients are not exposed to onerous legal obligations which they may be unable to comply with.

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Rhys Langley, Associate

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