The Inside Edge
A home’s sustainability characteristics should be considered within property valuations, according to a new information paper, entitled Sustainability and Residential Property, launched 20 Sepember by the Royal Institute of Chartered Surveyors (RICS).
The issue of sustainability is not currently viewed as significant to property market value. However, this is changing and RICS is suggesting that, should a home possess sustainability features, which are likely to have an impact on value, this should be reflected in a valuer’s assessment of the property.
Sustainability features can include a home’s energy efficiency rating, the materials used in its construction and other features such as an energy-efficient boiler. Although, elements such as a building’s proximity to public transport links and its ability to adapt to occupiers’ changing future needs could also be considered.
Sustainability, which covers a broad range of physical, environmental and social factors, is moving progressively higher up the coalition government’s agenda. It is likely that residential markets will become progressively sensitised to sustainability considerations. Therefore, RICS feels residential property valuers should be fully aware of the sustainability characteristics of buildings when carrying out a valuation. Also important is consideration of legislation and policy that can influence current and future value.
Ben Elder, RICS Global Director of Valuation, said: “Although market awareness of sustainability has risen significantly, attention is currently focused largely on a home’s energy efficiency, propensity to flood and carbon emissions. However, a property’s sustainable status can cover a range of social, environmental and economic matters that can potentially lead to changes in demand and therefore affect value.
“With the increased emphasis on green living and energy efficiency, it is highly possible that the market will need to adapt. This new information paper offers advice to our members, recommending that they are fully aware of sustainability policy and the characteristics of individual buildings when valuing property.”
Anwar Harland-Khan, CEO of Sustain Worldwide, an exclusive membership organisation of sustainable developers and industry professionals delivering sustainability, said: “We welcome the RICS information paper, while noting that in our opinion it is long overdue that the valuation industry recognised the inherent value premium in sustainable property.
“It stands to reason that today’s sustainable homes have a value premium. They are cheaper to run because they are better insulated and require less heating and mechanical cooling, and they are fitted out with ‘hands off’ energy saving applications. What’s more they will increase in value faster because these homes are more ‘future proofed’ than a conventionally built existing house that will require expensive retro-fitting.”
Gordon Miller is sustainability & communications director of Sustain Worldwide. He writes for The Financial Times and The Sunday Times and founded eco homes website whatgreenhome.com and local energy and awareness social enterprise The High Barnet Green Home Zone.
For more information about Sustain Worldwide’s members’ luxury sustainable homes, resorts and communities, visit www.SustainWorldwide.com or call +44 (0)20 7754 5557