There are an estimated 10,000 fewer homes in Ireland today because of the Government’s strict energy regulations, according to a housing policy think tank.

Since 2019, all new builds in Ireland must have a Building Energy Rating (BER) of A2, following an EU directive.

This week, the Government announced a simplified BER scale will come into effect from May 24, with eight ratings from A0 (for zero-emissions homes) down to G. From 2030, all new-builds will have to have a BER of A0.

However, the rule has already driven up building costs, along with external inflationary factors, and has left the country with thousands fewer homes, according to Progress Ireland, an independent think tank focusing on housing, infrastructure and innovation.

The research comes as the Government continues to fall far short of its housing targets and its promise to build 300,000 new homes by 2030. 

Last month, the Banking and Payments Federation Ireland warned of housing supply problems next year, due primarily to a steep drop in the number of commencements.

Progress Ireland’s director of housing policy, Seán O’Neill McPartlin, told the Irish Mail on Sunday he is ‘not pro or anti’ any regulations but said each should be ‘judged by their effects, not their intentions’.

He noted the positives of BER regulations are that homes are ‘more comfortable’ and ‘nicer to live in’. But he added: ‘Equally indubitable is that BER makes homes more expensive.’

Mr O’Neill McPartlin cited a recent report from the Economic and Social Research Institute (see below) which he said made it ‘not even obvious that the entire energy performance system is achieving its intended goal of reducing carbon emissions in households’.

Around the same time the BER regulations were updated in 2019, the Society of Chartered Surveyors Ireland was reporting seven per cent construction inflation.

Mr O’Neill McPartlin said: ‘We know it’s gone up a lot since that regulation came in. I am not saying that increase is entirely attributable to the BER change – that wouldn’t be justified.

‘But all of the people in the building industry we’ve spoken to – and understanding how energy regulations translate into the sort of materials you have to buy and the amount of materials you have to buy – we know they have made things more expensive to build.

‘And I think we should really look at all things that raise construction costs and ask – is that worth the housing supply that we’ll predictably lose because of it?’ he said.

For its calculation, Progress Ireland used a 2024 paper by Ronan Lyons and Maximilian Günnewig-Mönert, which found that a one per cent increase in construction costs is associated with roughly a 1.9 per cent fall in new home supply in the long run.

They used that to estimate conservatively that 10,000 fewer houses have been built since 2019 thanks to the BER rule.

From 1983 to 1993, over half of new builds in Ireland had a BER of D or lower. But since 2015, 95 per cent of new homes have been A-rated. Since 2020, that figure has been 99 per cent.

‘Some BER ratings are undoubtedly good,’ Mr O’Neill McPartlin said. ‘We don’t want to be living in sheds. I don’t think anyone thinks it should go back to G or anything like that.

‘And in fact, it would be difficult to work with the EU to change it at all. But I think we should, in general, ask of all regulations – is it worth the houses that we lose? You gain in comfort with a high BER, but people lose comfort if they can’t get a home because that home can’t get built.’

Claire Irwin, resident quantity surveyor on RTÉ’s Room To Improve, stopped short of drawing a direct line between BER and a lower housing stock.

But she agreed that BERs ‘and the standardisation and regulation of the level of insulation, heating, windows’ has ‘definitely increased the cost of houses’.

Ms Irwin told the MoS: ‘It’s the cost of everything – the cost of blocks, the cost of foundations, the cost to acquire land, the red tape to get your planning approved. All of those things have delayed houses being built in Ireland as well.

‘But [Mr O’Neill McPartlin] is definitely correct, in that it has increased the cost to build a house,’ she added.

Ms Irwin also commented that there is ‘one wee thing with BER that kind of gets me’.

She said that while a ‘super-insulated’ house that is not 100 per cent sealed would earn a higher rating than an air-tight house with less insulation, it may not be more energy efficient in reality.

As to the building regulation she would like to see eased, Ms Irwin said there is ‘an awful lot of red tape involved in getting planning approval to start projects’.

She said: ‘Projects are stalled so dramatically. We’re renovating vacant and derelict properties – just the length of time that it takes to get them approved.’

She also called for uniform planning standards across the country.

‘It’s funny, something could get planning approval in Donegal, and for a very similar house in Dublin we’d have to jump through hoops, or vice versa,’ Ms Irwin said.

‘Or you might get approved for a planning exemption in one county, and in another county you’d work on a job a couple of years later and you wouldn’t. That bugs me, that it’s not standardised across the country. It really restrains projects from taking off.’

colm.mcguirk@dmgmedia.ie