Property experts call for industry to step up the fight against climate change or face substantial financial risk
A group of leading property experts have called for the industry to step up the fight against climate change by making sustainability a key priority in the UK's planning system.
The proposals set out include sustainable design principles being intertwined into planning requirements and an annual greenhouse gas target for commercial buildings in order to drive down the industry’s carbon emissions.
As an industry, UK property is currently responsible for approximately 40 per cent of Britain’s carbon emissions, according to the UK Green Building Council, making it one of the largest sole contributors to the nation’s carbon footprint. Despite the UK Government becoming the first to legislate for a net-zero target by 2050, the property industry is yet to make substantial progress in driving down emissions.
Analysis from property experts Bidwells, who helped deliver the UK’s largest non-residential PassivHaus building at The University of Leicester in 2015, has shown that all properties in England rated D-G on their energy performance certificates had a potential energy bill of £21.3bn a year – and this could be brought down to £15.2bn if all those properties were brought up to at least a C standard, saving £6bn on household energy bills.
Energy Performance Certificates were introduced by the government in 2007 to show the efficiency of buildings: A is the highest, G the lowest. However they are only required when homes are traded – so the government only has a snapshot of domestic energy efficiency.
In 2018, about 1.3 million homes were traded, of which 45.3% were rated A-C, and 54.7% D-G. The average energy bill for a grade A property works out at £820 a year and is £3,128 for a grade G asset. Those proportions were then applied to total UK housing stock, which stands at close to 24 million, to show £32.5bn spent on energy in 2018. The energy bill for all the G rated properties alone in England – of which there is an estimated 200,000 - was £631m in 2018.
To turn this around, property experts are calling for PassivHaus principles to be enshrined in planning for all new build developments across the Oxford and Cambridge Arc.
PassivHaus is a rigorous approach to sustainable design that originated in Germany but has been widely adopted across the UK, with the local councils in Norwich, Exeter and York embedding the design standards into their development requirements. The recent Stirling Prize-winning Goldsmith Street development in Norwich achieved PassivHaus status, providing 105 homes that cost around £150 a year to heat.
In addition to more sustainable planning requirements for new developments, industry leaders have also called for a greenhouse gas per floor area target for commercial buildings. Such a target would be locally determined and enforced by the council to ensure it meets the needs of the surrounding community.
Currently, commercial buildings are woefully underprepared for scaling-up the fight against climate change. The Climate Risk Real Estate Monitor (CRREM) project, currently under development with funds from the European Commission’s Horizons 2020 programme, estimates that UK commercial property needs to reduce its carbon emissions by 91 per cent by 2050 to stay in line with 1.5 degree celsius target of global warming. According to research from property consultancy Bidwells, in 2018 there were 3,213 commercial buildings alone registered and deemed un-lettable due to having an F or G rating Energy Performance Certificate (EPC).
Property experts believe that by creating a greenhouse gas per floor area target and tying it to the building’s insurance premium, the long-term operation of the development will become more important than the value uplift. As a result, commercial buildings will be viewed as operational assets that must perform in-line with the greenhouse gas targets to remain attractive and viable investments over an extended period of time.
These proposals are just two of the recommendations put forward in the ‘Radical Regeneration Manifesto’ produced by property consultants Bidwells, global architects Perkins and Will, and policy advisory business Blackstock Consulting.
The manifesto is comprised of contributions from twenty-six leading property and investment companies, led by global architects Perkins and Will and leading science and tech real estate advisor Bidwells who put leaders together from companies including Legal & General, LaSalle Investment Management, Apache Capital Partners and Urban Splash. The manifesto contains 16 policy recommendations to overhaul the tax, transport and planning systems to help make Britain a more attractive and sustainable place to invest and develop.
Asif Din, sustainability director at Perkins and Will, said:
"In 2019, we should be embedding sustainability at the heart of any development policy. Climate change is here and now, which means the days of greenwashing within our industry must end. We need to see beyond the the net-zero barrier and thread it through everything we design, deliver and operate, which needs to be reflected in the planning system. To do this, we need to garner a greater understanding of the operational and lifecycle emissions of buildings. We need to work together as an industry to create buildings that are fit for purpose over their whole lifespan, to incentivise long-term investments, and to design adaptable buildings to face the challenges that the climate crisis poses."
Phillip Nell, head of UK real return assets at LaSalle Investment Management, said:
"Sustainability is a core focus for regeneration and, while more are paying attention to it, there are still many institutions that see it as just a nice addition after the bottom line. With current technology, it’s very easy to build sustainable, low carbon buildings from scratch but there is little focus and few incentives for retrofitting and updating existing buildings to meet the challenges of climate change. In fact, there seems to be more financial gain from tearing down old buildings, which contain huge amounts of embodied carbon, rather than looking to upgrade or repurpose them. We need to come up with Modern Methods of Repurposing and stricter greenhouse gas targets to help the sector drive down its emissions."
Eleanor Jukes, senior investment manager at Legal & General, said:
"The impacts of climate change on the built environment make partnership and collaboration essential for successful and sustainable regeneration. It’s crucial that the development process becomes greener, but to make serious headway in curbing the sector’s emissions we need to take a holistic approach that links transport, clean energy and digital infrastructure back into the built environment. Our vision is to create a sustainable ecosystem that underpins the urban centres of the future and connects systems, people and places."