Housebuilders spending up to £25,000 per home on nutrient neutrality fixes

Housebuilders are having to spend up to £25,000 per home on mitigation schemes in order to secure planning permissions in parts of the country affected by the ongoing nutrient neutrality crisis, parliament has heard.

According to evidence given to a House of Lords committee yesterday by James Stevens, director of cities at the Home Builders Federation, said the trade body’s members had to spend anything between £5,000 and £25,000 in order to privately procure works to mitigate potential nutrient pollution from new housing development.

Stevens also used the session to accuse the government’s system of environmental regulation of a “breakdown”, which he said had allowed the problem of water pollution to continue and worsen until it reached the point at which housebuilders had been forced to stop building.

Housebuilders need to provide mitigation for pollution in certain areas due to guidance from government agency Natural England, which has advised 74 local authorities against granting residential permissions because of the poor condition of waterways running through protected habitats. A 2018 European Court of Justice ruling means that any permission granted in defiance of the advice would be vulnerable to legal challenge.

The HBF has previously said that more than 100,000 homes in the planning pipeline are now held up in an effective moratorium across the country by the issue, and last week issued a report saying that between 37,000 and 41,000 fewer homes per year could be built due to the issue.

Stevens added that his members had also cited costs of anything between £10,000 and £20,000 per unit to pay for impact of meeting the additional requirement to deliver biodiversity net gain on all development, due to come into force in November.

Stevens said that where different parties had come together to provide a “market based solution” to the nutrient neutrality problem, as in the Solent catchment, the cost was around £3,500-4,000 per home. However, he added this was the only such scheme operating in the country. He said: “The Solent is the only catchment with a functioning market providing credits for housebuilders […].

“The figures we’re getting back from our members who are having to procure solutions themselves without relying on the market facilitating that, is of between about £5,000 and upwards of about 25,000 per unit.”

“For biodiversity net gain, that’s still in its infancy, but some of the figures I’ve heard from our members is between £10,000 and £20,000 per unit. But of course, in due course if the government adheres with nutrient neutrality and biodiversity net gain you’d expect a market to emerge where farmers would want to sell their land for nature based solution – but that market isn’t there yet.”

>> See also: How do we stop the nutrient neturality problem holding up development?

>> See also: Solving nutrient neutrality puzzle is a key test of ministers’ housebuilding commitment

Stevens added that there was a “big question” over the “effectiveness of the British regulatory state” in terms of regulating to environmental standards and pollution via organisations including Natural England and the Environment Agency (EA), adding that the EA had been aware of the water pollution problem for 30 years.

He said: “It [the EA] should have been communicating to Ofwat […]and to Natural England to ensure that this issue didn’t just come out of the blue.

Suddenly this guillotine comes down on housebuilding, with housebuilding singled out, no other sector of the economy is hit. There is a question about what the EA and Natural England have been doing to forewarn and require water companies in the water industry to act to upgrade water treatment works to deal with this problem.

“We do seem to have a breakdown in the capacity of the British state to manage for water infrastructure and the housebuilding industry doesn’t really understand why we have been landed with this problem”

Stevens was giving evidence to an inquiry into the impact of environmental regulations on development by the House of Lords’ Built Environment Committee alongside Paul Brocklehurst, chair of Land Promoters and Developers Federation. Brocklehurst said that the industry was further hamstrung because mitigation schemes for the nutrient pollution problem had proved very difficult to get in place, with a promised government mitigation plan operating only in small parts of the country, and with Natural England requiring the mitigation schemes to be up and running before projects could be approved.

He said: “A major factor is mitigation is itself very difficult itself to put in place. We have a very very limited pool of these mitigation schemes across the country.

“Natural England are saying […] you’re not allowed to occupy a house until a measured outcome has been delivered. In terms of cash flow for a housebuilder than just does not work. It’s the wrong way round.”

He added the issue was having a disproportionate impact on SME builders operating in affected areas, with some looking to lay off staff.

Last July the government announced plans it said were designed to assist the industry in solving the nutrient neutrality problem, by forcing water companies to upgrade water treatment works by 2030 and roll out a national nutrient pollution mitigation programme, but the industry said the package did not go nearly far enough.