In a groundbreaking move, Housing Secretary Michael Gove has announced a substantial overhaul
of nutrient neutrality regulations, drawing praise from the housebuilding industry.
The changes, set to be introduced through an amendment to the Levelling Up and Regeneration Bill, will eliminate the “requirement” for Natural England to advise against housing developments in areas where protected waterways face potential pollution risks.
Gove asserts that this amendment, combined with measures designed to combat nitrate and phosphate pollution in rivers, will inject a staggering £18 billion into the UK economy. The executive chairman of the House Builders Federation, Stewart Baseley, has described this decision as “very welcome,” while Jennie Daly, the CEO of Taylor Wimpey, believes it will “help deliver the country’s much-needed new homes.”
However, the move to reduce the powers of Natural England has sparked controversy. Critics argue that it jeopardises the state of UK waterways. Greenpeace claims that the government has “completely given up on saving our great waterways and the precious wildlife they host.” Craig Bennett, the CEO of The Wildlife Trusts, accuses the government of a “disgraceful” breach of earlier promises to maintain environmental protections.
These changes stem from a 2018 European Court ruling that prevented local authorities from approving housing plans in areas where Natural England warned of the poor condition of protected habitats. Currently, this advice applies in 74 councils across England.
To address nutrient pollution from new developments, housebuilders will still be required to contribute, with the government doubling the size of the Nutrient Mitigation Fund to £280 million. Larger developers are expected to make fair contributions over the coming years.
While initial reports suggested that councils would gain the autonomy to accept or reject Natural England’s advice without fear of legal challenge, these reports have proven incorrect.
The proposed amendment will be presented to the Levelling Up and Regeneration Bill shortly. Additional measures to combat agricultural nutrient pollution, including grants to farmers and farm inspections, are anticipated to offset the impacts of these changes. It’s important to note that evidence suggests new housing contributes to just 5% of the nutrient pollution problem in rivers.
Listed housebuilder share prices initially reacted positively to the news, with some experiencing a 3% increase. However, the ultimate implementation of these changes hinges on the passage of the Levelling Up and Regeneration Bill, currently facing opposition in the House of Lords.
Housebuilding giants, including Barratt and Taylor Wimpey, welcome these developments, but the industry remains cautiously optimistic amid concerns that the proposed changes may not materialise.
The housing sector’s ability to unlock previously stalled developments and contribute to the economy depends on the successful realisation of these regulatory shifts. The government’s commitment to mitigating pollution in agriculture and industry and improving water infrastructure has garnered support from industry leaders.
As this historic amendment navigates the legislative process, it stands to reshape the landscape of housing development in the UK, potentially enabling the construction of over 100,000 new homes while ensuring the protection and restoration of vital waterways.
At Advantage, we understand the complexities and challenges faced by the construction and housing industry. While this deregulation may present new opportunities for developers and builders, it also underscores the importance of risk management. Environmental considerations, like those related to nutrient neutrality, can impact the success of construction projects.
Our comprehensive insurance solutions are designed to help our clients navigate such challenges while protecting their interests. As discussions around these regulatory changes continue, we remain committed to providing insurance solutions that address the evolving needs of the industry.
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