RESIDENTIAL developers who meet green standards can now access a new Green Homes Incentive that will help deliver more thermally efficient
and lower carbon homes in Wales.
Funded by the Welsh Government, the Green Homes Incentive is
available on residential development loans from Development Bank’s
Wales Property Development and Wales Stalled Sites Funds and
includes a reduction in loan repayment fees of up to 2%.
The Development Bank of Wales was set up by the Welsh Government to
support the economy of Wales by making it easier for businesses to get
the finance needed to start up, strengthen and grow.
In total, the Development Bank invested £197.6 million in the
2020/21 financial year.
Finance for up to 100% of building costs is available with interest
rolled-up throughout the loan term. Eligibility will depend upon
qualifying criteria that includes EPC A Rating/Passivhaus status,
non-concrete structures and non-fossil fuel heating systems.
The operation of buildings accounts for around 30% of emissions in the
UK, mainly from heating, cooling and electricity use. For new
buildings, the embodied emissions from construction can account for up
to half of the carbon impacts associated with the building over its
The latest RICS data (2020) shows 77% of all new builds in Wales
achieved an EPC B rating, with only 5% achieving an A rating. Additional
insulation, double/triple glazing and solar panels can all help to
improve EPC ratings.
It is also widely accepted that alternative structures such as timber
frames, hempcrete blocks, limecrete blocks and mycelium bricks have a
lower carbon impact than concrete. The use of timber frames has become
more commonplace over the last decade but recent global pressures on
timber cost and availability have led to a number of developers
reverting to concrete hence the need for financial incentives.
Developers that install non-fossil fuel heating systems will also be
able to benefit from the new incentive as ground and air source heat
pumps significantly reduce operational energy demand during the life of
Minister for Climate Change, Julie James said:
“Tackling the climate emergency must be at the heart of everything we do in Wales as we all work together across this decade of action.
“The Green Homes Incentive will support SME housebuilders in
delivering low carbon homes, part of our journey to a Net Zero Wales by
“Finding innovative ways to improve the energy efficiency of new homes
will also bring down costs for homeowners which is crucial as we help
people through a cost of living crisis.”
Giles Thorley, Chief Executive of the Development Bank said:
“Sustainable business is at the heart of our core principles, so we
want to support developers making the change to greener development
practices as part of the Team Wales effort to build a stronger, greener
“Our Green Homes Incentive offers reduced lending costs for housing
schemes that will help to deliver more thermally efficient and lower
carbon homes in Wales. It’s the first of several initiatives as we
look to support the journey to net zero with funding that helps
forward-thinking companies to address climate change.”
Cenydd Rowlands, Property Director at the Development Bank, said:
“We are already seeing examples of developers wanting to make the change towards more eco-friendly options particularly given the upcoming
changes in building regulations which are likely to impose higher
eco-standards across all new schemes.
“We know the importance developers place on certainty of funding.
This has become even more important of late given the additional
uncertainties around other key elements of development, such as supply
availability and material cost inflation. Our dedicated property team is
here to help with a quick decision-making process that is designed to
get more developers building greener housing as quickly and efficiently
Cardiff-based developers Wellspring Homes hope to use the Green Homes
Incentive for their next development. Using local contractors, the
company is close to completing the construction of its first property
built using Hempcrete, a natural ‘better than zero carbon’ material
that is breathable. Planning permission has been granted for their next
development in Neath that will feature eight low-carbon homes. With an A
grade energy rating, all will have solid wall construction using
Hempcrete and will be fitted with air source heat pumps.
Director Hadleigh Hobbs added:
“We’ve got an opportunity to build housing differently in Wales by using more innovative methods of construction to deliver the next generation construction to deliver the next generation of living space. Each one of
our homes is being built using solid Hempcrete walls. This gives really
good thermal mass with its unique properties helping to store and
release heat from the building’s walls, limiting fluctuations in
temperature, reducing energy costs and virtually eliminating
condensation by releasing internal moisture. The use of hemp within the
walls also locks up carbon dioxide in the structure of the building.
“However, funding is essential for our industry if we’re going to
scale-up and deliver more low carbon homes in Wales. This is what will
enable us to refine the technology and make the homes of the future
commercially viable. The Development Bank understands this challenge
and is now able to offer the support needed to drive down carbon
emissions with the development of new homes that are well-built,
beautiful to live in and beneficial to our natural environment.”