Wednesday, 25 February 2015
Topical Issue Debate
I thank the Ceann Comhairle for selecting this Topical Issue for debate. I have already spoken to the Minister about it and I know he is working on the matter. I am raising this item in the context of recent changes that were made to the Central Bank's lending requirements for mortgages. There is a specific issue concerning one-off rural houses. When houses are being built currently, the burden of regulation on signing off on the construction element is fairly onerous. That is because the person who draws down a mortgage for a one-off rural house is not the same as a standard developer. In other words, they are taking 100% of the risk, so it is in their interest that the house is properly built, engineered and overseen.
In common with other Deputies, I have been contacted by draftsmen, engineering technicians, architectural technicians and technologists who for years have built up a level of experience in maintaining a good stock of one-off rural houses. The Minister of State will know from his own constituency that one-off houses did not cause the difficulties arising from the construction sector's collapse, and neither did one-off houses cause difficulties such as those at Priory Hall or with pyrite.
People building one-off houses are insistent that proper standards are required. Sign-off costs for one-off houses currently range from €4,000 to €7,000 plus VAT. Another problem is that some people who have built up quite an amount of experience in recent years, including technologists and engineers, are excluded from being able to sign off for an individual's mortgage drawdown. Shrinking the number of people who can do this, particularly in rural locations, is adding to the cost burden involved.
The Minister for the Environment, Community and Local Government had very good reasons for introducing such changes. As we all know, the low standards that applied under the previous Administration left us with pyrite and Priory Hall. They also left us with houses falling down all over the country and unfinished housing estates. Given that the mortgagor for one-off houses is taking 100% of the risk involved, that risk is not borne by the State. The Minister of State will not find anyone knocking on his office door at the Custom House having had difficulties with a one-off rural house due to planning permission and the way in which such construction is supervised. He will find, however, that speculative sales in housing estates are causing problems.
I would like to see some sort of re-examination of the building regulations regarding one-off houses. This re-examination should include architects, engineers and technicians with years of experience in the design, construction and supervision of such projects, including the drawdown of mortgage stage payments for one-off rural houses. The Department should ascertain whether we have gone too far in this respect. Anecdotally, from my own constituency in County Limerick, technologists and technicians say that on the one hand they are being pushed out, while, on the other, costs are rising.
I wish to thank the Deputy for raising this important matter. It is an issue of concern to many Deputies around the country who have raised it consistently.
Following public concern with regard to the widespread failure to comply with regulatory requirements in all sectors of the construction industry, the Building Control (Amendment) Regulations 2014, otherwise known as Statutory Instrument No. 9 of 2014, were introduced to strengthen the arrangements in place by requiring greater accountability in relation to compliance with building regulations. In relation to single dwellings, common problems which have come to the attention of my Department include inadequate drainage and septic tanks, necessitating the introduction of an inspection regime; sub-standard energy performance arrangements, as evidenced from the national building energy rating database; and occasional structural problems arising from poor workmanship or poor choice of materials.
Over 5,000 construction projects have commenced, to date, since the new regulations took effect on 1 March 2014. Over 1,100 of these are new build single dwellings. This is a significant number of projects and already a significant number of home owners, builders and other professionals are gaining direct experience of advancing one-off housing projects under the new arrangements. These dwellings will now enjoy the benefit of statutory certification of their design and construction, having been inspected and certified by the builder and a registered construction professional who have lodged compliance documentation with the local authority, where it is validated and included on a public register.
We now have a credible regulatory framework for building activity in place on a nationwide basis for the first time in the history of the State. While this is of immense benefit to home owners, obviously the issue of cost and value for money is of paramount concern for any new home owner. While costs are determined by market forces and are therefore outside the scope of my regulatory powers, I recognise the importance of ensuring that the regulations do not impact unduly on one-off housing, particularly in relation to cost.
As I have indicated previously, my Department, in conjunction with the Housing Agency and the construction professional bodies, is currently finalising additional guidance on an appropriate inspection plan for a typical one-off dwelling. This guidance will be helpful in better informing the market in relation to offering realistic and appropriately priced professional services for such work. I intend to publish this guidance shortly.
In my opinion, based on the advice I am receiving, the inspection regime for one-off houses should cost no more than €3,500. However, I am aware of many cases where the cost of inspections has far exceeded this amount, something I am determined to address in as far as possible.
I intend to announce details of the imminent review of SI 9 of 2014 early next month. It is appropriate that it be reviewed now that it is almost a year in place. I expect that the issue of cost in the self-build and one-off housing sector will be a key component in this review. I look forward to engaging openly with all stakeholders on the matter, including the technicians and technologists the Deputy has mentioned. A full report on the matter will be produced by the second quarter of 2015 and will inform further regulation in this critical area. I will arrange for a copy of the report to be made available in the Oireachtas Library in due course.
My Department will continue to engage proactively and constructively with all key stakeholders and interested parties in reviewing and strengthening the arrangements in place for the control of building activity. This is in the interest of the consumer and the person who builds, and also in the interest of keeping a high standard and keeping accountability at the forefront of construction here.
I welcome the Minister of State's decision to review SI 9 this year. It is an important signal to send out to people with one-off rural houses. I know the Minister of State is a great proponent of one-off rural houses. From my time on the local authority and from the Minister of State's membership of Waterford County Council, we both recognise that there is a very strong anti-rural house lobby, some of whom might have found a welcome home in the Department of the Environment, Community and Local Government. I am glad the Minister of State will take on that lobby with the review of the statutory instrument.
The current obligations regarding inspections and regulations for one-off houses also extend to house extensions of up to 40 sq. m, which is onerous. In many cases, this might not even involve a mortgage and might involve the person paying for it himself or herself. If it involves a mortgage, it could be much smaller than the actual cost because of savings, etc., which is also onerous.
The requirements under the existing regulation to meet energy ratings almost lead to a kind of passive house environment, which adds costs of €10,000 to €15,000. This is all having an impact on something those in my area and, I know, the Minister of State in Waterford want to sustain, which is the viability of people being allowed to construct a house on their own land in most cases. These are ordinarily the sons and daughters of farmers or landowners. If we want to maintain a vibrant community in rural areas particularly, this is something that needs to be addressed. I support the Minister of State's approach in reviewing it. I hope that review follows up with changes specifically aimed at the one-off rural house.
The Deputy is correct in pointing out that these regulations also apply to extensions. Many years ago, I built my own house in Waterford by direct build. I know the challenges that people face, but people generally set out to build the best quality home for themselves.
Anecdotal evidence suggests that inspections cost between €5,000 and €16,000 which is unacceptable and I am determined to do something about it in the short term and the medium term. In the short term, I will publish guidance stating that inspection regimes should appropriately cost no more than €3,000 to €3,500. However, it is important to maintain standards and accountability in terms of construction. I am sure Deputies will agree we cannot go back to the days of putting up houses that are substandard; I know that many professionals signed off on these in the past. Under the new regulatory regime, they are now accountable. It is important that we maintain that element.
I acknowledge that the technicians and practitioners the Deputy mentioned have vast experience in this area and I believe they can contribute in a more enhanced way. I am sympathetic to the Deputy's views in this regard. I am preparing a review of SI 9 generally and this review can consider one-off houses and extensions. I envisage an increased role for the practitioners to play a more proactive role in the inspection regime. I will do this because I believe there is a role for them in this. However, we need to have appropriate standards and appropriate recognition of experience in this area. I hope that as part of the review we can come up with a model that recognises this experience and recognises technicians' contribution. I believe they can play an important role as they have done for many years regarding one-off houses and extensions. I expect progress on the matter in the coming weeks and months.