First published by Financial Reporter
Going ‘Green’ is an absolute necessity
Being ‘Green’ is not so much a lifestyle choice anymore as an absolute necessity and the increased focus on this area, particularly as it relates to property, the way we heat our homes and the impact this has on the environment, is only going to intensify.
Of course, this is not something you can grasp at the drop of a hat; it is a complex area and there are a growing number of potential solutions available.
How do we determine value within the context of energy efficiency?
What is certain is that homeowners/purchasers/lenders are becoming more engaged with this area and certainly, from a surveyors’ perspective, we need to collectively get our heads around how we approach property, how we determine value within the context of energy efficiency, and what this means across the entire stock of property in this country, especially the back books of our lender clients.
At the moment we have the Energy Performance Certificate (EPC) and that does its job, with one of the major concerns however being just how much weight is given to it by buyers and sellers. I think it’s fair to say that, probably at present, not a lot but that will change.
Once we are out of this ‘boom’ period where buyers currently feel they can live with a property with a poor EPC rating just so they can get into a new home, we believe much greater notice will be taken of a property’s energy performance and this will impact on values – a green premium will start to emerge and conversely homes which are showing poorer ratings may well see their values drop.
When owners are being hit in the pocket then we are likely to see some concerted action in this area. What will that mean? Well clearly there is a big debate about energy usage/leakage and the like. Gas boilers are likely to become a thing of the past with greater use of electricity produced in a much safer way through green energy technology like wind farms, etc.
Traditional (and inefficient) ways of heating a home like radiators – often positioned below windows which immediately let the heat out – are already starting to disappear. However, the UK’s energy industry will need to cope – when everyone on the road has an electric car or two, and is trying to charge them at the same time, will our system be able to cope? It will need to.
And, this is without even mentioning the Government, what it needs to do to ensure it gets its carbon emissions down, and what it will require of the housing market in order to help it meet its targets. The likelihood is that more stringent EPC ratings levels, not just for new-build properties but all of the housing stock in the country, will be brought in and this will create a greater emphasis on what can be done to increase them in order that they are eligible to be sold.
It’s a key issue for surveyors
In that sense, we will need to collectively up our game. I’m not suggesting that every single property market stakeholder needs to be an expert in the variety of ways you can heat or cool a home, but it’s undoubtedly a key issue for surveyors because we are being asked for advice in this area.
What advice do we provide? Well, to answer that, we need to begin work on training, education and CPD requirements for surveyors that can evolve as the requirements evolve because the greater need for power within the home, specifically electrical, is not getting any less. Add in that move from gas to electric and there are big questions to ask around efficiency, production and sustainability.
It truly is time to get educated in this area – this is going to play a major part in all our professional and personal lives for the foreseeable future.