Speaking at the New Homes Senate, Andy Mason (pictured), head of strategic partnerships and housing at Lloyds Banking Group, said that energy efficiency was “pretty low down the priority order” for buyers and that would be a “big problem” going forward.
Mason said that up to a third of UK carbon dioxide emissions came from housing and this will need to be reduced by 95 per cent to meet current net zero targets.
He also said that around 4.5m homes overheat in the UK and the risk of flooding is increasing and will be a “growing consideration for people building on new sites and buying new homes”.
He said: “I think we don’t start from a great point there in terms of the way we look at sustainability. If we start with, how do we look at the homes themselves; highly sustainable homes are typically more expensive as new technology costs money. It’s not always consumer friendly, and energy efficiency definitely creates tradeoffs in homeowner usage.”
He added: “Consumer demand for sustainable homes is low. We don’t really sell the benefits of sustainability. I think primarily the focus is either on cosmetic features or location.”
Mason continued that sustainability is not really thought about from an adviser perspective, pointing to the fact that conversations weren’t often had around energy efficiency and run costs.
He said: “From an adviser perspective, how do we start to build that conversation, the affordability conversation, the availability of products into the price journey, so at least sustainability is a consideration for homebuyers.”
He added that whilst green mortgage products were becoming more available, but they were “typically selected once the customer has already bought the house or and is on the journey.”
Mason said: “Lender support has been pretty low. We’ve got products with discounts and cashbacks, which is a start, but I think we need to do much better.
“I think there’s much more we can do actually to raise the profile on sustainability.”
Consumers need an ‘educational baseline’
He said that there needed to be greater awareness with older properties of where they were starting from an EPC perspective and give something to aim for.
Mason added Lloyds Banking Group has launched a proposition with Energy Savings Trust which would help customers view what their current EPC rating is and how they can approve it.
It also told them how much it might cost and what the saving on bills might be. He said that this tool would provide an “educational baseline” for customers.
Mason said that the cost of improvements would often be higher than the short-term energy saving, using an example where it would cost £25,000 to improve a property but save £600 a year.
“Who would do that without other kinds of financial support?” he said.
He added that Future Homes Standard, which will happen in two stages with a 31 per cent reduction in emissions targeted next year and 75 to 80 per cent reductions by 2025, would place increased pressure on new technology where the broker would play a vital role.
Mason said: “We need to get our heads around the positives of this and some of the questions that people might have around it. If we don’t understand it, we can’t talk about it and we can’t turn it in to a virtue.”
Sustainability needs to be promoted across supply chain
Mason said: “The question really is how do we create demand and therefore create value for all of this investment that’s going into sustainability.”
From a builder’s perspective he said it needed to be clearer that new homes would be of better quality and more sustainable but that they could well be more expensive.
He added that estate agents and valuers would need to talk about energy efficiency and sustainability to help foster consumer demand.
He said that in “mature markets” in Europe a bigger price differential was emerging between energy efficient properties and non-efficient properties and that “might be where our market could head”
Mason said: “The problem I hear quite often is we don’t the value back on the investment in building a property that’s energy efficient, but I think if we get all of this right and start creating demand from people who say these are great places to live, they are efficient and comfortable, actually the value point should fall into place.”
