Green homes could spell the end of freehold for new build

Eco-friendly homes could mean the end of home ownership in the new-build sector, research has revealed.

Housebuilders may stop offering freeholds to prospective buyers. Instead, they may offer only a lease so that they can compel householders to use specific, eco-friendly electricity suppliers and thereby meet government targets on reducing carbon emissions.

Two top housebuilders separately commissioned lawyers last year to investigate how buyers could be compelled to use green electricity.

After months of research, both teams concluded that the only way to bind residents to one supplier was through leases.

Brian Mark, director of environmental engineer Fulcrum Consulting, has worked on the research. He said the onus on housebuilders was to ensure that electricity came from renewable sources to meet the zero carbon homes target by 2016, but that this would have to be done in a way that would allow them to make a profit.

He said: “Developers will have to set up their own distribution networks to bring electricity from renewable sources into the project, but EU energy rules dictate that once a system is set up, the owner is obliged to offer its use to other suppliers.

“This means that any electricity supplier could use the network to supply residents on the zero carbon development with non-renewable electricity.”

Housebuilders say this electricity would come at a cheaper price than the tariff they could offer because they have to cover the cost of building and running the network.

Mark said the lawyers were confident that residents could be bound to one supplier in a lease but it was not clear if they could be tied in by a separate contract, which would allow housebuilders to sell homes with a freehold.