How to achieve A rated homes by 2020

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Zoe Hines
5 years ago
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1 How to achieve A rated homes by 2020 Dr Mark Hinnells Environmental Change Institute University of Oxford Christopher Holt Managing Director, Energy International Systems Group Limited Opportunities for intervention on homes A range of opportunities. Different approaches needed for owner-occupied (69%), private rented (11%), social landlord (20%) Building Regulations: 200,000 new homes p.a. Extension or refurbishment: via building regulations or extensions to borrowing purchase or borrowing or stamp duty: 1-1.3m homes sold p.a. 5.5billion in stamp duty in 2004/05. Chancellor has announced zero duty for zero carbon homes Rent Income Tax allowances: around half homes, could use ECAs model or French model Council Tax: all homes liable Key issue here is point of purchase or borrowing 1

The Home Information Pack Label available at point of viewing (but possibly not visible) Based on RD SAP 2005.

points Further cost = 3 SAP points Total 1-1.

2 The Home Information Pack Label available at point of viewing (but possibly not visible) Based on RD SAP To get zero net emissions =SAP 100 and microgeneration Recent Building Regs are B or C For refurbishments, target improvements: Low cost = 8 SAP points Higher cost = 7 SAP points Further cost = 3 SAP points Total label categories The likely future with HIP The potential is unambitious eg cost effective is energy only using current energy price and does not include any gain in house price How much of this will actually happen? How is energy rating linked to home value? How is this linked to the lending market? The rate of improvement will be poor. Need to mandate action 2

3 Cost savings Annual Heating cost A B C D E F G Average heating energy cost for 80M2 home Average heating energy cost for 80M3 % change from previous band 53% 46% 30% 26% 26% 30% SAP is non-linear, and covers an order of magnitude of energy costs large saving (% and ) between mid point of each band Moving from middle of E to A saves around 500 pa on heating bills, more than 80% No takeback allowed for At SAP 2005 prices, worth around 10Bn p.a. across 20M homes (owner occupied plus private landlord). If house is worth more, the cost saving only needs to cover interest payments on the amount borrowed to improve 0 A B C D E F G Need to segment the market 7% 6% 5% Percent homes 4% 3% converted flat 2% Purpose built flat 1% 0% Mid Terrace Semi detatched Detached Detached homes largest energy consumers, with the biggest savings. Also the most valuable (average detatched in South > 300K), 3

4 Benefits of A by 2020 Creation of a new market of 200 billion plus over 15 years Employment could be 40,000 jobs Additional Income Tax and VAT revenue to Treasury (average just under 1bn p.a.) which could be recycled through eg lower VAT, stamp duty or support for first time buyers Carbon emissions from homes in 2020 estimated at 45MtC. Estimated saving 14 MtC p.a. by 2020 Reduced dependency on imports Insulation against future energy prices Value of the mortgage market Total lending for homes is around 700 bn against an estimated UK housing stock value of around 3 trillion Cost of 200m is lost in noise of increasing house price growth of 3-8% p.a. and an expected doubling before 2020 More than one way of looking at costs: Either, simple energy payback years, current energy and equipment prices, assuming no increase in value Or, is capital cost fully reflected in increase in value? evidence in Australia is yes. Then energy savings must be greater than interest payments to be cost effective 4

5 Issues to consider Security Dealing with fraud requires an independent certification system with money held in escrow account until completion a key issue will be where lenders are lending 90% plus of the mortgage Scope House purchase landlord mortgages re-mortgages commercial mortgages For consideration Exemptions (eg flats, historic buildings), allowable deferments or additional support needed (eg first time buyers, shared ownership properties, and significant refurbishment plans) Regional variations in house prices Interactions with EEC (eg use EEC to reduce interest payments) Ways forward Build on the Home Energy rating (right information at the right time) A Private Members Bill obligation on mortgage providers to offer an interest only extension to the mortgage to enable refurbishment A requirement to refurbish to at least a C on the energy label if sold between now and 2010, B between 2010 and 2015, and A between 2015 and 2020 Find a champion to lead the way A local council working with a local mortgage provider 5

Buy to Let Mortgages. 8th February We have two ranges of Buy to Let mortgages:

Buy to Let Mortgages. 8th February We have two ranges of Buy to Let mortgages: 8th February 2018 CORRECT AT THE TIME OF PRINTING We have two ranges of Buy to Let mortgages: Special Situations for landlords who want to buy and refurbish a property before letting it out, and for British