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Martin's Blog 19/03/12- Eco-friendly Homes - A Way to Get the Bank on Your Side?
We are all becoming increasingly aware of climate change and global warming and whether you just manage to recycle a few bottles each week, or have become a real ‘eco-warrior’ – you would have had to be living on the moon for the last decade to escape the efforts of the government to reduce carbon emissions. Given that it is estimated that up to a quarter of all carbon emissions are as a direct result of us heating, lighting and living in our homes, there is a huge incentive for the Government in reaching is targets for reducing carbon emissions, to target the energy efficiency of the homes we live in.
One such initiative that came into force from 1st May 2008, was the Code For Sustainable Homes initiative. If you have bought or sold a property in the last 12 months or so, then you will have already felt the impact of this Code by the fact that the property you were buying or selling would have had to have an Energy Performance Certificate on it.
As far as new build homes are concerned, the Code for Sustainable Homes has an assessment method for rating and certifying the performance of new homes in terms of their ‘environmental friendliness’ with a view to encouraging ‘continuous improvement in sustainable home building’.
“The Code for Sustainable Homes provides a comprehensive measure of the sustainability of new homes, ensuring that sustainable homes deliver real improvements in key areas such as carbon dioxide emissions and water use. The Government’s ambition for the Code is that it becomes the single national standard for the design and construction of sustainable homes, and that it drives improvements in home building practice.”
At the same time as all this good stuff on sustainable development has come about, we have been in the midst of a credit crunch with lenders pulling in their horns left, right and centre and refusing mortgages to people and projects who would have previously represented a good risk. So, as anyone who has been refused credit or a mortgage in the past year will tell you, the attitude of banks to lending has become extremely cautious.
But put these 2 factors together – as did some forward thinking developers that I met in Lincolnshire recently – and you could have a formula for being granted credit AND doing the right thing for the environment.
Our contributors planned to convert an old community centre into private residential dwellings, but they were initially declined a mortgage because the bank was unwilling to back a project to develop flats given the uncertain economic situation and property market. However, when the proposals were shown to be the development of a number of eco-friendly starter homes – the bank jumped at the chance to lend and were right behind them. It seems that the fact that the properties were to be built to a Sustainability Rating of 3 -4 clinched the deal.
The Code Rating System
The Code for Sustainable Homes covers nine categories of sustainable design including:
• Energy and CO2 Emissions – With the aim to limit emissions of carbon dioxide (CO2) to the atmosphere arising from the operation of a dwelling and its services.
• Water – With the aim to reduce the consumption of potable water in the home from all sources, including borehole well water, through the use of water efficient fittings, appliances and water recycling systems.
• Materials – With the aim to encourage the use of materials with lower environmental impacts over their lifecycle.
• Surface Water Run-off – With the aim to design housing developments which avoid, reduce and delay the discharge of rainfall to public sewers and watercourses. This will protect watercourses and reduce the risk of localised flooding, pollution and other environmental damage.
• Waste – With the aim to recognise and reward the provision of adequate internal and external storage space for non-recyclable waste and recyclable household waste.
• Pollution – With the aim to reduce global warming from blowing agent emissions that arise from the manufacture, installation, use and disposal of foamed thermal and acoustic insulating materials.
• Heath and Wellbeing – With the aim to improve the quality of life in homes through good day lighting and to reduce the need for energy to light the home.
• Management – With the aim to encourage and reward provision of guidance enabling occupants to understand and operate their home efficiently and make the best use of local facilities.
• Ecology – With the aim to encourage development on land that already has a limited value to wildlife, and discourage the development of ecologically valuable sites.
There are some minimum standards which all new build homes must reach and these are set out in the Code for Sustainable Homes Technical Guide. To download the latest version updated May 2009 please click here:
Each of the nine categories listed above includes a number of environmental issues. Each issue is a source of impact on the environment which can be assessed against a performance target and awarded one or more credits. Performance targets are more demanding than the minimum standard needed to satisfy Building Regulations or other legislation. They represent good or best practice, are technically feasible, and can be delivered by the building industry.
Some of the issues have mandatory minimum performance standards because they are so important. For these there is a single mandatory requirement which must be met, irrespective of what Code level rating is sought and the property must meet these requirements even if Level 1 (the lowest) rating is being granted.
So what does a Sustainability Rating of 3 – 4 actually mean?
Since our contributors where aiming for a minimum of Code Level 3, this would mean:
The home will have to be 25% more energy efficient than one built to the 2006 Building Regulations standards. This could be achieved by:
The Future of New Homes
By 2016, all new build homes will have to have a sustainability rating of 6.
Clearly, the costs of meeting these requirements for a rating of 3 – 4 is greater than a bog standard construction, but the additional investment is likely to pay off – and our Lincoln developers were already assured that the finished product would be in strong demand. So, given that housebuilders and developers (both large and small) are currently having to offer large discounts or other ‘sweeteners’ to purchasers just to get housing inventory sold, this eco-friendly home strategy could be a shrewd move. Certainly, the fact that the bank were so keen to become involved once they understood the nature of the properties being developed is a sure sign of the possible success of this venture.
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