Building a Sustainable Future for the Prime Property Market
We envision a prime property industry that not only thrives but also takes responsible strides towards sustainability. It is important to delve deep into the transformative power of energy efficiency and sustainable practices within the prime property market. At The Luxury Property Forum, we continue explore the need to be more sustainable with the growing significance of energy-efficient homes, the drive towards greener practices, and the urgent need to address climate change's impact on property values. LPF Founder and CEO, Priya Rawal looks into how property values can be impacted by sustainability initiatives.
Energy-Efficient Homes: The Path to Long-Term Value
According to the Royal Institute of Chartered Surveyors (RICS), homes with superior energy efficiency credentials are proving to be more resilient in maintaining their value amidst market fluctuations. A significant 58% of respondents highlighted that properties with higher EPC ratings have fared better than those with lower ratings. This reaffirms the trend noted in the December 2022 survey, where 61% of respondents emphasised the same dynamic.
Recognising the Value
Beyond just holding their value, energy-efficient homes are attracting greater interest from potential buyers. A notable 34% of surveyors reported witnessing increased interest in properties that offer better energy efficiency. This shift in buyer preferences underscores the growing importance of sustainability within the housing sector.
It is not just buyers who are recognizing the value of energy-efficient properties; tenants, too, are displaying a preference for such homes. Some corporate clients are now exclusively seeking properties with EPC ratings of C or above, reflecting the increasing emphasis on sustainability from both residential and commercial tenants.
“In a cooling market, the resilience of energy-efficient homes shines through. The RICS survey reinforces the significance of sustainability in the housing sector. Regardless of size and scope, these findings naturally filter into the prime property market, as properties with better ratings hold their value and attract greater buyer interest. We are seeing a stark increase in UHNWIs asking about energy efficiency and long term sustainability of their luxury homes. Long term sustainability holds importance whilst homes are occupied, but more so when they are unoccupied and residents are in their second and third homes. Whilst the rise in energy prices may not be the key factor in a buyer’s decision making process at this level, it is increasingly becoming an important part of the conversation. ”
Transforming Properties through Sustainable Retrofitting
RICS has also taken a significant step towards transforming residential retrofitting practices in the UK. By launching an eight-week consultation, RICS aims to gather valuable insights and opinions to shape the new Residential Retrofit Standard. This initiative marks a pivotal moment in the journey towards more energy-efficient buildings.
A Pathway to Desirability and Value
The significance of energy-efficient homes is reinforced by the findings of the recent RICS Residential Market Survey. The results clearly demonstrate that energy-efficient properties not only hold more appeal but also retain their value effectively. Retrofitting homes offers numerous benefits, including reduced energy consumption and the creation of a more comfortable living environment.
Recognizing the need for assistance, RICS conducted a consumer survey in collaboration with YouGov in July 2023. The survey revealed that 36% of homeowners lack knowledge about making their homes more environmentally friendly. Additionally, an overwhelming 78% of respondents expressed the desire for surveyors to offer retrofitting advice during the property purchasing process.
Driving Change, Together
Antony Parkinson, RICS Senior Property Specialist, aptly points out that the energy efficiency of UK homes needs immediate attention. The urgency to act stems from the potential for significant positive impact, including financial savings and environmental preservation. Efficient homes utilise less energy, thereby helping homeowners save money while contributing to a greener planet.
Mitigating Climate Change Impacts on Property Values?
Recent surge of “sinking” claims in London and the South East of England shows the impact of climate change on the city's historical homes and neighbourhoods is a wake-up call for the entire property sector.
We cannot ignore the evidence that erratic and extreme weather patterns are causing damage that could topple house prices and challenge the very foundation of our industry.
London’s Vulnerable Foundations
The foundation of this subsidence crisis lies in the geological composition of the region. Much of London and the South East are built on London clay soil, which is prone to expanding and contracting significantly with changes in moisture levels. The recent series of very wet and very dry spells have intensified ground movements, leading to damage to buildings and triggering a worrisome increase in insurance claims.
“This alarming situation demands immediate attention and a collective commitment to adopting sustainable practices in the property sector. By acknowledging the vulnerability of our built environment and seeking innovative solutions, we can safeguard our homes and communities from the growing risks posed by climate change.”
TOGETHER TOWARDS A SUSTAINABLE FUTURE
The sustainability crisis in London demands our immediate attention and action. Let us use this challenging time as an opportunity to come together, share ideas, and build a legacy of resilience and responsibility for generations to come. Together, we can create lasting change in the luxury property sector and make a meaningful difference in the face of climate change.
we are PRIME AND THE Luxury property forum
The LPF is a member of We are PRIME. We are PRIME Ltd is a social enterprise established to assist small businesses (particularly and originally in the super-prime construction sector, though not exclusively) in beginning to develop their own corporate social responsibility initiatives, and in measuring those initiatives with a simple, user-friendly scoring tool.
Being a PRIME member together with The Luxury Property Forum; we believe that best practices should be the standard across the industry. Sustainability is not merely a trend but a crucial element for shaping the future of luxury property and construction. We are committed to following the PRIME Principles to guide our journey towards a more sustainable and diverse future.
The PRIME Principles are:
1) Being Environmentally Better;
2) Embracing Sustainable Innovation;
3) Spreading the Word;
4) Delivering Impact;
5) Making a Difference; and
6) Being Accountable
Our commitment to the PRIME Principles goes beyond a mere checkbox exercise. These principles are challenging, but they inspire us to be better and make a genuine difference. We aim for them to become deeply ingrained in our corporate culture, driving us to act and achieve meaningful results in our journey towards sustainability.
The LPF is dedicated to paving the way in building a greener and more resilient future for the property market. By integrating sustainability into every aspect of our projects, championing eco-conscious practices, and fostering a culture of climate resilience, we can create not only luxurious but also environmentally responsible homes for generations to come. Together, as an industry, we hold the power to shape a brighter and more sustainable tomorrow.
FIND OUT MORE
If you would like to find out more please visit https://weareprime.org.
The PRIME Principles and PRIME Scoring method have been released under an open-source licence. As such anyone can use them in their own business as a management tool.
If you wish to purchase an Official PRIME Score (which is a moderated score, ensuring its accuracy) or to find out more , please contact will@weareprime.org. LPF members receive special rates.
To view The Luxury Property Forum’s Statement on the Prime Principles and see our PRIME Score, please visit our About Us Page https://www.theluxurypropertyforum.com/about