The word ‘green’ is increasingly being used when describing the property of the future, the property that our government should be focused upon building and not to mention, the type of property that consumers should be choosing.
Brokers and lenders are increasingly made aware of environmental schemes that are being introduced by property developers to enhance the saleability of their properties. In an ever changing market, just what are the benefits of going green and who are consumers looking to drive these changes forward?
Media attention
It would be difficult to find someone in the UK today who does not know the meaning of his or her ‘carbon footprint’ or who has not heard of the expression at the very least. It has been reported across all media to consumers and the focus on the carbon impact of our daily lives does not seem to be going away, with the message being amplified each and every day.
The majority of the carbon footprint press attention in the past year has been focused on transport, in particular, air travel. However, one carbon culprit that has evaded a large amount of media attention is the home, which is surprising when over a quarter of our carbon emissions in the UK are generated from the electricity we use to heat, light and run our homes.
Although more developers are now creating homes which are specifically designed to be eco-friendly, it is important not to forget the changes that consumers can make to their current homes in order to lessen their impact upon the environment.
As well as increased consumer demand for mortgages tailored to eco-homes and self-build projects, consumers are increasingly searching for ways of financing environmentally friendly additions to the home. Not only can a greener home help cut fuel bills, but it can also improve the overall well being and quality of life of the home owner.
Judging new homes
From April 2007, new housing in England is assessed by the Code for Sustainable Homes, which scores new homes on a system of six levels, with six being the highest. Homes are judged on their looks, design, construction, and materials used, together with factors such as their energy efficiency and waste management systems.
Not only does this enable new homes to be regulated on their overall efficiency, but it also provides the purchaser with a more pleasant and healthy place to live.
However, when considering the state of the nations homes on a larger scale, it is not to say that improvements can’t be made to homes that are not currently environmentally friendly. It would be much better for the environment to upgrade existing homes and properties, for example those perspective buyers looking to purchase older properties on larger plots with a view to re-building, rather than improving the current structure.
Adding value
Recent research by GE Money Home Lending (GEMHL) has found that by adding environmentally friendly additions to the home such as solar panelling, double glazing and more efficient central heating systems, home owners are not only helping the environment by reducing their energy consumption, but they are also increasing the value of their home.
Demand for greener homes is on the increase and as consumers become more aware of energy-saving factors in the home, the benefit of installing these features is that it often increases its overall value.
GEMHL’s research was carried out on a national basis and questioned estate agents as to the value added to average homes. It found that by installing green products such as replacing older windows with double-glazing, installing an energy efficient central heating system and by adding solar panelling, homeowners could add over £12,000 to the value of their home today.
This goes a long way to compensating for the cost implications of installing such features and does not take into consideration the savings made in energy bills on a day-to-day basis whilst the owner resides in the home and makes use of the enhanced energy efficiency. In addition, as these features become more desirable, the future value and saleability of such properties is likely to increase further.
Regional differences
The research also showed that regional differences also emerge. Estate agents in the West Midlands estimate that by adding solar panelling alone, a properties value increases by over £7,000. Installing improved central heating and energy efficient windows would further push a property’s worth up by over £24,000.
This proves that apart from enhancing the energy efficiency of your home, you are also making a sound investment to the overall value of your property.
Lenders and brokers should also be aware that in addition to enhancements a home owner can add the companies providing the products to finance them are becoming greener with many larger companies working to lessen their impact upon the environment.
Ecomagination
In May 2005 General Electric launched the global ecomagination brand to draw together the company's ‘green’ products. These include a range of goods from aircraft engines to wind turbines, desalination plants, low-energy light bulbs and new materials such as plastics that require fewer polluting chemicals in their production.
To qualify for the ecomagination brand, products such as low energy light bulbs for the home must be certified by an independent third-party examiner as providing a substantial environmental benefit of some kind.
As resources and the environment as a whole come under more strain from the demands of the modern world, and consumers increasingly demand better value products that also equate to help satisfy their green desires, brokers and lenders alike would be better equipped if able to provide some helpful advice and added value information.
Value added broker advice for the ‘green’ home purchaser
1 Tell the purchaser to ask for evidence of the homes energy saving credentials
2 High levels of insulation should be present
3 The property should be double glazed
4 The purchaser should know if the boiler is of high efficiency
5 Appliances should be ‘Energy Saving Recommended’
6 Plenty of daylight should be available to reduce heating bills
7 Draughts should be controlled in doors and windows
8 Check to see what energy saving devices are included with the property
9 See if it is possible to obtain grants to install energy saving measures
10 Good local transport links will mean the purchases has to rely less of a car
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