Sustainability is our biggest opportunity… and responsibility

This is a pivotal moment for UK housing. Years of neglect, along with on/off subsidies for renewable energy and wavering governmental support for creating more sustainable homes has left the UK with some of the least efficient homes in Western Europe. However, a number of factors have now aligned to create a ‘tipping point’ for accelerated change.

Firstly, banks are already starting to tie mortgage deals to the EPC ratings of homes. This makes energy efficiency a more pressing concern for buyers and sellers – as it has been for landlords for some time.

Secondly, the UK government has set up a new Energy Efficiency Taskforce in response to the current energy crisis. Its goal will be to reduce energy consumption from buildings and industry by 15% before 2030, with £6bn of extra funding between 2025 and 2028 to help with this.

Reducing reliance on Russia and other energy suppliers is obviously currently the main driver behind this, alongside the government’s ambitious Net Zero 2050 goal. As part of this, bringing down energy bills for stretched UK households will be another powerful motivator for change.

More awareness needed

Lastly, greater awareness among consumers about the need for swift solutions to climate change will add ever-increasing pressure on home builders to bring their buildings up to standard. When it comes to housing, 72% of UK new build buyers and tenants value sustainable building features, according to over 12,500 resident reviews on HomeViews.

These findings were published in our report Sustainability: The Resident Perspective, the latest version of which was published in October 2022. While the majority of residents in our study favoured sustainable building features, the data also suggested they had a poor grasp of which features were the most effective.

When asked which sustainable buildings features they valued the most, new build residents said they valued some of the least effective features the most. They prioritised recycling facilities over building efficiency ratings and renewable energy sources. Sustainable construction was the least-valued feature by reviewers. Yet this is a feature that could have a major impact on a building’s efficiency and running costs.

Ana Brenikov, director of ESG at Zoopla, commented on this in a recent webinar we hosted to discuss the findings of our sustainability report. “People are over-valuing things like recycling – which is important, but nowhere near as important as having a well-insulated home,” she remarked.

“At Zoopla we’re seeing the trend – people definitely care about being sustainable. But how they are being sustainable when buying and occupying a home is something we all need to invest in from an education perspective.”

Sustainability not for the young? 

We created our sustainability report last year because we saw that developers and operators were rarely communicating sustainable benefits to prospective residents. We wanted to find out which sustainable features developers should focus on in their marketing, and how resident demographics affected those priorities.

Perhaps the biggest headline from the report was that the younger the resident, the less they valued sustainability. First time, or younger, buyers have plenty of challenges to face just getting onto the ladder. Sustainable features were clearly seen as less of a priority – perhaps even a luxury they couldn’t afford – for the younger reviewers in our report.

Opportunity for new build

A recent study by Zoopla found that new homes provide a 52% saving over similar older properties. The carbon output of a new home was also shown to be a third of that of an older home. In today’s climate of soaring energy costs and faltering demand for houses, these are marketing angles our industry can’t afford to ignore.

The Zoopla study also showed that six out of 10 buyers underestimated the savings a new build home could offer them for energy bills. In the current climate, this could mean the difference between keeping a home warm or not.

There is a huge opportunity here to educate buyers and tenants on the savings and environmental benefits offered by new build homes, as well as the sustainable features that have the biggest impact on both costs and environmental impact.

Those stats on savings become even more impressive for homes built to stricter efficiency standards.

Eco homes 

Our report included a case study on house builder Stonewood. Its recent Orchard Field development in Cirencester (pictured) was built to strict AECB standards and, in reality, it is pushing close to full Passivhaus levels. An estimated 70% saving on energy costs over a standard new build house meant that monthly bills were estimated at £66 per month.

Stonewood said their target buyers were extremely well-informed on the various energy saving features offered by these homes. Demand from this group was sky-high, and 100% of completed homes were reserved off-plan. In the webinar mentioned earlier, Stonewood managing director Sam Smart said they had managed to get the build cost premium down to just 15% for their ultra-energy efficient homes.

Risk involved

As he explained: “Of course, there is a risk involved with the increased cost of building homes like these, but the response we’ve had from buyers has been overwhelmingly positive.

“They’ve been extremely well-informed on the benefits of all the technologies we’ve used and are clearly drawn to more sustainable homes. Considering the current energy crisis, we expect demand for homes like these to grow.”

This triggers important questions all developers and operators should be asking themselves.

If customers are helped to understand the benefits of these homes, what is the resulting increase in demand and how much more are people willing to pay for these homes – whether investing, renting or buying as a home? What sustainable features can be added that will drive greater interest and significantly boost sales times or occupancy rates?

Educating the customer

Simply adding sustainable features into marketing materials isn’t going to be enough for most buyers and tenants. As the data shows, consumers are not well informed on the impact sustainable features could have on costs and carbon emissions, and on which sustainable building features have the biggest impact. So, there’s a need to educate consumers on the benefits of new build homes. Following that, there’s the opportunity to tailor building specs and increase promotion around the sustainable features that provide the most benefits.

As we saw in our report, different demographics clearly require a bespoke approach, making it crucial for developers and housebuilders to understand their target markets. Towards this goal, we’ll continue to assess the regional, demographic and sector-level variations in our annual report, as well as other reports focusing in on BTR, sales developments, top locations and more.

Our hope is that these insights will help our industry to improve education, build the right homes and then market them in the most effective way. Our customers and the planet demand it.