RECOGNISING ENERGY EFFICIENCY VALUE IN  RESIDENTIAL BUILDINGS

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REValue is a three-year project to develop international guidance for property appraisers, incorporating the collection and easy analysis of transparent energy data. This will help valuers to reflect the market value of energy efficiency (EE), in their appraisals of social and private housing stock.

Whether buying a new or second-hand car – or indeed a washing machine – the energy efficiency and consumption data are vital pieces of consumer choice information. There is, however, one major market where energy efficiency has not made the same inroads into consumer behaviours, and that is the property market.

Of every five buildings that exist today, four will still be standing in 2050. That should make energy efficient refurbishment a top priority for Europe, and an important opportunity for owners and tenants.

Despite these potential savings, energy efficiency is rarely the focus of residential renovations in Europe – and with 3.1 million dwellings refurbished annually, it is a problem that must be addressed. Adding weight to the issue is an increasing body of evidence that suggests that when renovations are completed with a view to increasing efficiency, the investments made are currently difficult to quantify in value terms.

The result is unrealised potential for energy demand reduction, and improved energy performance of domestic properties – both of which will help Europe reach the ambitious 2020 and 2030 energy efficiency targets of reductions of 20% and 27% respectively.

This is somewhat surprising considering Europe’s home energy bill is €340Bn per year, or roughly €500 per person, and almost three times the EU household water bill (€128Bn or €188 per person). Compare these figures with the EU’s yearly housing maintenance bill – totalling 20% of annual rents – and the scope for savings through EE become apparent.

However, there is limited knowledge of how, in practice, investment owners who have upgraded their properties have developed their business cases, and what lessons they have learned to inform future upgrade schemes. How did the owners and investors who upgraded justify the capital outlay? How did they obtain the money? And what did they learn?

This is where REValue comes in. The main purpose of the REValue project is to break down these barriers and help facilitate market transformation.

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