You might not have felt it, but on 30 June 2020, the first rumblings of a tectonic shift in the housing market began with the first reading of a bill which aims to set minimum standards for new developments.

Housebuilders and residential developers, would be well advised to have a look at these development standards now. The standards could be implemented at any point in the lifespan of many residential developments, and could therefore result in developers having to expensively retrofit properties to bring them up to standard. The wording of the draft law will be debated in March of this year, but the three key themes are clear. The bill proposes that all new builds must have:

• Full fibre-optic broadband (rather than a mixture of copper and fibre);
• An EPC rating of C or higher; and
• The electric vehicle charging points that are needed.

There is not a lot of information yet about how many charging points would be sufficient for a development. Some guidance suggests that all new residential buildings with a car parking space should be built with a charge point, other guidance suggests one charging point per 10 parking spaces. At the moment though, the raw numbers are less important than how those charge points are deployed.

A charge point on every drive

This gives the most utility to residents, but it also places the greatest burden on the cables and wires distributing power to the estate. Where electricity distribution networks need reinforcement, the developers requesting it will be responsible for the full upfront cost. They will be able to recoup some of their expenditure as future parties join downstream, but this is no consolation when large amounts of working capital are being invested in buried cables. The size of the potential spike in demand caused by many residents charging their cars at the same time could result in an eye-watering expensive network reinforcement, and these expenses will either come out of developers’ profit, or purchasers’ pockets.

So – is it just doom and gloom? Not necessarily. If developers start planning a development to incorporate communal EV charging infrastructure, rather than individual ones, a convincing case could be made that fewer charging points are required. Particularly adventurous developers could do well to start thinking about incorporating electric vehicles into a wider development eco-system, with charge points, solar panels, and district heating systems all owned and operated by a management company that works on behalf of the residents. Early adopters are already showing how demand spikes can be smoothed by turning off chargers when power is at a premium and turning them back on when it is cheap or generated on-site.

These business models are still being trialled and developed, and developers will need to take advice on a site by site basis to ensure they do not fall foul of the laws regulating electricity supply, generation and distribution. However, the direction of travel is clear, and though trial villages are underway, any developer who can turn this additional forthcoming regulation to their advantage will have a head start in this very competitive market.

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For further information on this fast-moving subject, do contact Isaac Murdy or another member of our energy team in your local office.

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Duncan works with fast growing family businesses and entrepreneurs to ensure they are successful and to help them achieve their goals through acquisitions, funding lines and exit and succession planning.

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Published: 21st January 2021
Area: Corporate & Commercial

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