RESEARCH

Decarbonising Residential Real Estate in the UK

Eco-friendly, green homes with ‘living’ grass roofs, adorned with solar panels and rainwater harvesting systems may once have seemed a futuristic, slightly ‘out there’ concept more likely to be seen on the likes of Grand Designs.

Now, though, such technologies and features are not only becoming more commonplace, but are a growing necessity.

Primarily, this is down to both changing legislation and consumer demand. The UK government has set itself the ambitious target of achieving net-zero carbon emissions by 2050. This essentially means negating the amount of greenhouse gases emitted by both reducing the output and creating ways of absorbing the carbon dioxide produced.

The country’s housing market, and more specifically existing methods of heating the home, are a significant part of this goal. Domestic heating currently creates around 14% of all the UK’s carbon emissions. But achieving carbon neutrality in this arena would cost an estimated £250bn, according to the Climate Change Committee, so it’s no mean feat.

Where to start with decarbonising homes

To decarbonise the country’s residential housing stock, the focus will need to be twofold: first, within the construction industry to create zero-carbon or low-carbon new-builds; and second, the mammoth task of retrofitting the UK’s existing homes.

Already, consumer behaviour is beginning to change when it comes to the energy efficiency of homes, and this will be a major driver behind making the change happen. Legal & General, for example, noted a 34% rise in the number of searches for mortgages that consider EPC ratings last summer. Increasingly, lenders are offering up ‘green mortgages’ which incentivise buyers of more energy efficient properties by offering favourable rates and deals.

According to research from Bloomberg Intelligence, 88% of prospective buyers now deem the energy efficiency of a property either important or very important, demonstrating how it is becoming central to the buying process. From a property investment perspective, the long-term nature of housing means that future-proofing by buying a zero-carbon-ready home is now more appealing than ever.

To stay ahead of legislative changes that are expected to come into force to back up the net-zero target, as well as those rules that have already begun to take effect such as the Future Homes and Buildings Standard, many developers are already focusing on some key ways to decarbonise their projects.

●      Renewable energy: Historically, renewable energy hasn’t been much of a feature in the UK’s housing stock, but this is changing. Increasingly, technology using solar, wind power, air heating systems, biomass and heat pumps are being installed to improve energy efficiency.

●      Insulation: This is something that can normally be easily added to an existing property, but in new-builds there are already new rules in place regarding minimum insulation. Some developers use green roofs and insulating cavity walls made from recycled materials to improve their eco credentials, along with high-quality windows and doors.

●      Sustainable materials: One of the biggest issues in the construction industry when it comes to greenhouse gas emissions is cement production. Increasingly, low-carbon cement is being used in residential buildings to decrease the carbon footprint.

●      Green spaces: These are not only a huge selling point for buyers, particularly when looking at city or town centre new-builds, but also a hugely important way that developers can decarbonise. This includes planting trees and plants to absorb carbon, and adding living walls, communal gardens and, again, green roofs.

Smart home appliances and systems are also enabling property owners and even rental tenants to boost the energy efficiency of their homes on an ongoing basis. For example, smart heating and cooling controls have become increasingly popular to allow users to save energy by switching off heating and appliances remotely.

Some new-build blocks even have geolocation sensors embedded, which can switch off the heating or air conditioning automatically when they detect no one is using a room or space. These systems can be personalised, too, so they can learn the particular schedules of a household and set routines for heating and power in the home, area by area.

The benefits of boosting energy efficiency in homes

As the government continues to expand and advance its plans for hitting its net-zero goals, it seems inevitable that more and more legislation will come in to impose potentially drastic changes on the UK’s property industry. So, at some point in the not too distant future, energy efficient properties will be a necessity rather than a choice.

However, there are already plenty of incentives to build and invest in new-build, low or zero carbon homes, as well as to begin improving the energy efficiency of existing properties. Aside from it being in the spotlight for the government, companies and individuals are taking responsibility for their environmental impact on a rising scale, and prioritising the energy efficiency of the buildings we live and work in is an important starting block.

On a financial level, it is now apparent that investing more money in an energy efficient property at the outset will save on costs over time through lower energy bills. Some research carried out last year by the Home Builders Federation revealed that new-build home owners save around £2,600 a year in energy bills on average. This is down to a combination of advanced heating systems, better performing windows, doors and insulation, and the installation of higher rated appliances. This research was also carried out before energy costs began to escalate towards the end of last year, so the savings could be even higher now.

Property investors looking to rent out their homes are also finding that tenants are more savvy than ever about EPC ratings, and will question this before signing on the dotted line. Just like in the buyer’s market, newer, more energy efficient homes in the country’s vast private rented market will attract more prospective occupants, making it a key consideration for landlords.

As more investors look to future-proof their property investments, developments that are already prioritising the decarbonisation of the built environment are becoming increasingly sought after. Eco-friendly features indisputably add value to homes, creating a scenario where buyers are willing to pay more to ensure their investment has staying power. 

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