CIH Scotland response to Scottish government consultation Building Regulations: The Scottish equivalent to the Passivhaus standard: Stage 2

CIH Scotland supports the improvement of building standards, including energy efficiency measures that will help to ensure the homes we build now are fit for the future. Increased energy efficiency helps to reduce fuel consumption which maintains comfort while keeping bills low. Reduced energy demand and the use of renewable heating systems are also essential to the Scottish government’s plans to tackle climate change and the statutory target of net zero by 2045.

However, we have raised concerns during previous rounds of consultation in relation to practicalities of delivering a Passivhause-equivalent standard, and the likely additional costs of doing so, particularly in relation to the delivery of social and affordable homes.  Depending on how any additional upfront costs of building new homes are funded, rent increases could outstrip savings made through lower fuel bills.

We appreciate the Scottish government’s acknowledgement of the challenges that could be presented by the introduction of new standards and its stated commitment to strike a balance between increased performance and deliverability. We also welcome the extended deadline for compliance with the proposed new standards.

However, we would like assurance from the Scottish government that Affordable Housing Supply Programme (AHSP) grant benchmark levels will be revised to take additional costs into account, ensuring that social and affordable home building remains viable.

The latest  AHSP outturn report for 2024/25 shows that the average cost for a social home delivered by a registered social landlord (RSL) as £197,708 with a grant level of 62%. For local authorities, the average cost was £195,208 with a grant level of 44%. If grant rates are not maintained at least at these levels, delivery of much-needed new homes will continue to fall.

The capital costs of the proposed new Passivhaus-equivalent standards will vary depending on the house type (whether it’s detached, semi-detached or flatted), and the heating system being used. Building costs are also higher in rural areas. While research suggests additional costs to meet Passivhaus standard would be as low as 2%, this would add around £4,000 to the cost of each new home at a time when social landlords are already struggling to make finances for new developments stack up.

The consultation document draws on technical cost analysis commissioned to inform the proposed standard. The analysis sets out capital costs of achieving “good practice” or “best practice” for a range of building types and heat types. It shows a national cost (capital, maintenance and replacement) of between £213 million and £1,460 million respectively.

Without additional grant funding to cover capital costs, the cost of increased borrowing will be passed on to tenants through rents, risking financial strain for low-income households.