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Sustainability can you sell it?

publication date: Jul 1, 2010
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Suistainable houseProgress is being made to incorporate sustainability into newbuild housing but it’s debatable whether it is enough to achieve the carbon reductions the government has committed to. New properties account for only one per cent of the total housing market and it’s estimated that in 2050, at least three-quarters of our current housing stock will still be in use.

The Oxford University Environmental Change Institute, in its 40% House report, suggested that over a million Victorian terraced houses would need to be demolished by 2050 and be replaced by energy efficient houses to meet our carbon emission targets. But that’s hugely wasteful and won’t play well with homebuyers, who find terraced houses highly attractive.

Still, something has to be done. According to the Energy Savings Trust, total CO2 from housing has hardly reduced since 1990 despite new building regulations being introduced, requiring more energy-efficient building methods and materials. Despite government schemes, homeowners haven’t introduced the simplest measures, let alone things like renewable energy or rainwater harvesting. 

Rating energy performance

The size of the task is easy to assess; the scale used in Energy Performance Certificates, which runs from A (very good) to G (very poor), the average house is rated E. There is a long tail of F and G rated housing – mainly 19th and early 20th century buildings – even buildings from the 60s and 70s score surprisingly badly.

Efficiency rating chartYou might think that recent housing would do better, but even properties built since 2002 often rate no better than C.
There is, in fact, quite a lot that can be done to improve the energy efficiency of older housing. Government campaigns have focused on the easiest steps – loft insulation and cavity wall insulation. However, installing wall insulation in a solid walled house is much more difficult, requiring external cladding (not welcomed by the planners) or major disruption as internal walls are re-rendered, together with some loss of space. So although the older housing stock is potentially an area where great efficiency gains could be made, HIPs are gone, but EPCs are here to stay it has been difficult to address.


While energy gets the lion’s share of attention, other aspects of sustainable living are less prominent. Water efficiency can be improved by fitting new shower heads, low-flush WCs, or air-mix taps, or by rainwater harvesting and the reuse of grey water, but relatively few houses are retrofitted in this way.

One of the difficulties with refurbishment is that properties are generally refitted on a single-property basis, so that there are no economies of scale. In terms of renewable energy, that means it’s only micro-generation that can be considered, whereas community CHP schemes are generally more efficient. Dan Bridgett at Barratt believes zero carbon developments aren’t possible much below a critical mass of 200 houses.

Jim Cornick, of Ecos Trust, says, “We’ve found it’s easier to design sustainability into a new development.” Not only do retrofits have to work around the existing building, they also have to take the occupants’ specific lifestyles into account. He says that when Ecos Trust is consulting on retrofits, “We spend two hours with people in their house, half that time is devoted to talking about how they use their house and what kind of lives they live.”

Besides, while there are plenty of buyers for new sustainable properties, there are relatively few householders who actively set out to ‘green’ their homes. “It’s certainly not a common interest,” he says. “It tends to be people who have an interest in the environment, often older people who are retired and are wanting to look at how they can make their home cheap to run.”

Inside suistanable houseCornick also believes that estate agents are still not interested in green issues, though he doesn’t blame them for it. “Maybe they’re reflecting their clients’ attitude,” he suggests. “Consumers simply aren’t interested on a broad scale yet.” There are specific technical problems with Victorian terraces, of which Jim Cornick sees a few at Ecos Trust. “Solid wall insulation opens up a whole range of issues,” he says, “often with planning; a lot of solid walled cottages now have exposed stone faces. Traditionally they were lime rendered, which would be a good way to introduce external insulation, but you would find significant resistance to that from planners.”


I approached a number of agents to talk about the issues of selling sustainable homes, but practically drew a blank on anyone who would comment. It seems that most agents regard EPCs as a piece of bureaucracy, rather than a possible source of useful information; while energy ratings are being included on sales particulars, they are not having any effect on value, or on rental levels achieved.

One agent who was willing to be quoted - but not willing to give her surname - was Lucy, who works with London agency Paramount in lettings. She says that while landlords need to comply with regulations on energy efficiency, they won’t get a better return by exceeding the requirements. “Few tenants pay a lot of attention to EPCs; if they like the property they’ll take it.” She says if a landlord wants to improve the rental levels he’s getting, “a new coat of paint will have far more impact on the price than a wind turbine.”

Indeed if there is an impact from EPCs it appears to be on the downside. “Buyers are more interested in the EPCs,” she says, “as they’re looking to see whether they can get a bit off the price for a bad rating.”


When EPCs were introduced, in accordance with the European Energy Performance of Buildings Directive, one of the main reasons for introducing them was the hope that housebuyers would use the recommendations in the EPC as a starting point for investing in energy efficiency.
The sales process, it was expected, would act as a trigger for change.

But a study last year by National Energy Services and National Homes Energy Rating, the accreditation scheme, now part of National Energy Services, which assessed over 213,000 EPCs and interviewed over 300 buyers, found only limited evidence that this was happening. Just over half of all homebuyers interviewed recalled reading their EPC; a third didn’t recall ever seeing it, which suggests that estate agents and conveyancers may have told the purchasers they could ignore it.

Out of those who actually read the EPC, only a third made one of the improvements recommended. That equates to only 15 per cent of all homebuyers – a pretty poor response rate. It is unlikely that many of these homebuyers implemented all the measures recommended in the EPC; in fact most appear to stop at low energy lighting and loft insulation, according to the report, which suggests that more radical – and carbon-saving – measures such as wall insulation and renewable energy are not being considered. While that is an improvement on nothing, it’s not the step change that the government is looking for. Only six per cent of all the housebuyers interviewed had considered installing renewable energy.


The potential gains are considerable. NHER calculated the effect of implementing the suggestions in the EPCs. If they had all been carried out, each household would have saved £182 a year on energy bills, and would have saved 1.2 tonnes of carbon emissions. That’s a 22 per cent saving, not quite enough to achieve the government target of reducing emissions by 29 per cent by 2020, but a good step on the way there.

NHER has suggested that the voluntary code is not working, and that sanctions should be taken against vendors who sell houses in an unimproved condition, such as extra stamp duty. That’s a major political hot potato, though, particularly now that the government has delivered on its manifesto promise to get rid of Home Information Packs (though EPCs remain necessary) and seems to dislike legislation.

EPCs are also subject to a good deal of criticism on the detail of their recommendations. For instance, the NHER report shows that 92 per cent of them recommend low energy lighting, and 63 per cent a replacement boiler – but only one per cent recommend biomass heating, even though that could deliver a huge impact in cutting emissions and costs. Because EPCs do not prioritise the investments recommended - other than dividing them into lower cost recommendations and ‘further measures’ on the basis of the initial cost – and because there is no link between the frequency of recommendations and the aggregate amount that could be saved, they are unlikely to achieve the intended end of getting householders to make a real saving in carbon emissions.

There is also a major issue with clashes between the various certification systems used for buildings. The EPC is based on different methodologies from the Code for Sustainable Housing, and the results can be confusing. For instance one house constructed under the German Passivhaus certification, which uses high levels of insulation together with passive solar gain for its heating, only got an EPC ‘C’ rating which is ludicrous, according to Mark Tiramani, who claims to have self-built the UK’s first Passivhaus.

The EPC doesn’t recognise a number of sustainable technologies, including turf roofs, small wind turbines, and composting toilets, so that again, a house using these technologies could score D or E, despite its high energy efficiency and low environmental impact. Air and ground source heat pump and micro-CHP are not included in the recommendations made within EPCs, and EPCs also don’t consider the structure or orientation of a roof when they’re assessing the potential for solar systems. That’s quite a number of gaps in the system.


Another pitfall with the EPC is that it presents a list of possible changes as single items. This goes against the recommendation of the Energy Savings Trust, which says that, “The key is to take a whole house approach to refurbishment.”

Jim Cornick says the piecemeal approach often leads to homeowners making inefficient investments. In particular, among householders who are environmentally conscious, there’s a tendency to focus on particular technologies while neglecting other, perhaps more cost-effective but less interesting, routes to energy efficiency. “Alternative energy is the often the thing people are interested in,” he says “but it’s a sort of eco-bling thing, whereas the hierarchy you should really follow is insulate-insulate-insulate, and only then start looking at the renewables.”

All in all, the EPC looks like a great idea that has been wrongly implemented. One major pitfall is that once the house owner has got the EPC, there’s no support mechanism to encourage or assist them in taking further steps. So, for instance, if solar thermal power is recommended, it’s up to them to find a reputable supplier, get planning permission if it is needed, and find out themselves about the availability of grants or feed-in tariffs.

Between the failings of the EPC, agents’ lack of interest, and poor consumer awareness, it seems that it’s going to be a long battle to get sustainability issues recognised in the resale market. Brian Scannell, MD of National Energy Services Ltd, said in last year’s report, “We fear that the targets for the household sector cannot be met with current plans.” Nothing has so far happened that could alter that view.