Housebuilding plans are seen as neither green nor pleasant

By Jim Pickard
Published: July 13 2008 19:34

From the highest point of the village of Houghton on the Hill, you can see the rolling fields of the Stoughton estate stretching out below. A vista of golden yellow and bluey-green criss-crossed by hedgerows, this is rural England at its finest.
But the idyll is under threat. An “eco-town” called Pennbury is to be built right in the middle of what is currently home to an array of wildlife from the great crested newt to four types of owl. “This is the lungs of Leicestershire,” says Kevin Feltham, leader of Cascet, an action group opposed to the town. “There are public rights of way here and it has long been a fantastic place to take the family.”
Local protesters say that, as well as lying on 750 hectares of farmland, the site has no transport infrastructure. “Major road-building would need to take place to link south-east Leicestershire with the M1 [motorway] to cope with the massive influx of people,” says Mr Feltham. “The local councils have rejected development on this site before for these reasons.”
Demand for homes is on the slide but the British government sees the country as suffering from a desperate housing shortage. The population of 61m is expected to rise to 65m by 2016 and, in addition to an influx of young immigrants, there is a shift towards people living alone.
So ministers are pressing ahead with plans for 10 “eco-towns” to be built within the next decade, to “rigorous” green standards. But the country’s political leaders are wrestling with the most surreal of dilemmas: how to make housing more affordable as well as energy-efficient while preventing a collapse in house prices that some say is the consequence of a 10-year boom in which prices trebled.
Economists are pencilling in a price crash of about 20 per cent as sales dry up. In part this is because people can no longer get hold of mortgages, as banks are in rapid retreat from risk. But the political debate seems stuck in the old grooves: how to build more homes and get more young people on to the housing ladder – a ladder that looks more precarious by the day.
Caroline Flint, housing minister, says the country faces “significant housin1g shortages”. The opposition does not disagree. “We know that the best way to improve affordability is to build more homes throughout the country,” says Grant Shapps, Conservative MP and shadow housing minister.
Such comments seem bizarre when set against the reality of new housing estates and city centre apartment blocks where units remain empty and housebuilders are taking desperate steps to sell them. House prices, having fallen for eight months in a row, are now 6 per cent down from their peak, according to Nationwide, a big lender. The share prices of Britain’s housebuilders have been in free fall. Taylor Wimpey, which failed this month to secure a £500m ($994m, €625m) rescue rights issue, ended last week 89 per cent below its 52-week peak. Its rival, Barratt Developments, was down by 93 per cent.
Yet the government’s aim is to build 3m new homes by 2020. That means 240,000 a year, compared with the 170,000 completed last year and estimates of little more than 100,000 coming on to the market this year.
Last summer, with house prices still soaring, the eco-towns must have seemed a brilliant way to help reach that target. Yvette Cooper, Ms Flint’s predecessor, compared the programme with the response to the 1950s housing crisis, which prompted a spate of “new towns”. Her plans would “increase housing and protect the environment as well”, she declared. “We need to substantially cut emissions from new homes and work towards zero-carbon housing and development.”
Critics of the schemes, however, say they are more about meeting the supposed housing shortage than improving the environment. In the words of Brian Berry, director of external affairs at the Federation of Master Builders: “Government greenwash.”
First, many of the chosen sites will occupy farmland rather than disused urban sites. More­over, building a new town requires huge amounts of energy and materials – even if the final result is “green”. The “zero-carbon” nature of the eco-towns that the government proclaims applies only to their future energy consumption. Why not instead tackle the 600,000-800,000 existing empty homes, which could be refurbished at a lower financial and environmental cost?
Few genuine eco-towns exist anywhere. Plans drawn up by Arup, the global design and engineering firm, for a green city in Dongtan, China, have not begun to take shape. There are widespread fears that Britain’s eco-towns will be “eco” only by name. Lord Rogers, the acclaimed architect – and proponent of sustainability – describes them as the “biggest mistake this government could make”.
The scepticism rose another notch when it emerged that eco-towns, which will not be ready for at least eight years, could carry less stringent environmental standards than will by then be required for every new home. Mr Shapps, while backing the housebuilding programme, derides that as “the greatest farce of all . . . Those eco-towns will be built at a lower environmental level than the houses that will in any case be built at the same time in 2016.”
Action groups have sprung up to protest against several of the proposed sites. The Leicestershire protesters, determined to retain their piece of paradise, have tried everything from petitioning the government to protesting outside branches of the Co-operative group, the retail chain that owns the land. The Co-op is rehashing old development plans under the “pretence of eco-friendliness”, in the words of Mr Feltham.
The biggest test of all, should the eco-towns get built, is whether people will be prepared to pay much more to live in them rather than buy an older property. One report suggests that the cost of meeting the higher environmental codes varies from £19,000 for a flat to £47,000 for a larger house. Another, from Savills estate agency, shows that only one in five would pay more for good insulation and energy savings. Even fewer would pay more for green energy or water saving features.
Liz Peace, head of the British Property Federation, a building trade association, says the eco-towns could be an excellent way to showcase modern building design techniques. But she questions whether the plans will survive the slowdown. “Market forces will determine whether they are viable and if the demand isn’t there they won’t get built.”
Ms Flint argues that the cost of building sustainable homes will fall over time, thanks to economies of scale as technology becomes more widespread. She hopes to whittle down a list of 15 proposed sites down to 10 within months. But as housebuilders slash thousands of jobs, watch their share prices dive and await the first corporate collapse in the sector, the eco-town dream looks further away than ever.
Additional reporting by David Patrikarakos and Daniel Thomas
Copyright The Financial Times Limited 2008