Developers may have to accept lower margins, as they will probably be unable to pass on the higher cost of meeting environmental construction standards, says Savills.

The agent says the cost of development sites has risen sharply because of increasing competition for land and, as a result, developers will be hard pressed to recoup the additional costs associated with higher environmental standards.

Recently published figures by Cyril Sweett show that meeting the zero-carbon standard could cost up to £36,000 a dwelling.

A poll carried out by the same firm shows that householders are not concerned about how sustainable their home is and suggests that developers will not be able to charge a premium for environment-friendly housing.

Cyril Sweett also found that any benefit to be derived from the stamp duty exemption for new-build zero-carbon housing was likely to be limited by the fact that it did not apply to resale.

A separate survey published by the agent Knight Frank indicates that a “severe lack of land supply” has led to rising site values and lower margins for housebuilders in the South-east.

Postscript

For copies of the reports by Savills and Knight Frank go to www.building.co.uk/reports

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