What Requirements Does the Code for Sustainable Homes Place on Green Buildings?

Developers are taking on larger costs in order to build green. Fortunately, there is a market for residential property that has a lesser impact on the environment.

In 2010, the UK government set out to reduce carbon dioxide emissions by 20%, a disproportionate amount of which (30%) comes from housing. Part of the impetus for reducing the carbon footprint of residential dwellings is that the aging UK housing stock compares poorly to that of other European countries – with energy-hog buildings that disproportionately add CO2 to the atmosphere.

In response to this, new homes being built and older homes being retrofitted are certainly trending to green, energy-efficient standards. That is, energy and other resource efficiency is becoming the norm in residential structures (not to mention commercial and other large-scale education and healthcare buildings). This says a lot about the degree of interest in building greener and achieving a generally more sustainable world.

How applying various green standards might affect the dearth of housing in the U.K. – where the country is building about 100,000 fewer homes each year than are required – is a different question.

For those who can afford it, a green home is what they want. By the statistics released in March 2013, approximately 280,000 homes that are either built or are in the design stages have achieved Code for Sustainable Homes’ “Standard Assessment Procedure” certification. This measures the environmental performance of a home and has become the national standard for design and construction of sustainable new homes, in particular.

Measurements under the code result in a ratings of zero to six stars, the larger number being the most optimal. Homebuyers are now looking at this star system as a means of evaluating the home’s value. The criteria by which the system is based are the following:

• Energy use and CO2 emissions – For each star ratings level a minimum number must be reached.

• Water use/savings – Considering both interior (household) and exterior (garden and car washing) use.

• Material sourcing (minimizing impact of resource use and waste) – That which is required to construct the home should be made of recycled materials and locally sourced where possible.

• Surface water run-off and mitigation of flood risk – Measuring how a building might contribute to floods, use water-capture methods and materials where possible.

• Waste reduction – Building or property features that enable recycling and composting; also, reduction in construction material waste.

• Use of insulation and efficient heating systems to mitigate environmental impact – Minimisation of pollution that would otherwise result from inefficient heating systems.

• Contributions to occupant health and wellbeing – The comfortable home should have good daylight access, provide for private spaces, offer good sound insulation, and be accessible and adaptable.

• Impact on and protection of the local ecology – Specifically, how well the home integrates with the local environment, minimizing its impact on land features, flora and fauna.

This Code is one of many measurement systems and benchmarks that the country and its building industry have used over the past several decades (building regulations calling for tighter building envelopes have been in place and increasingly stringent since the 1960s). But it can impact the resale value, as buyers can look at the star ratings as a means of comparing one home to others.

One of the larger drawbacks of the Code for Sustainable Homes is how all costs are borne by developers. This then becomes a question of whether environmental standards will fly in the marketplace, where a sustainable home will clearly cost more to build and which then must by valued sufficiently by the home buyer.

In the midst of a housing shortage, affordability remains an important matter. But the crush of demand calls for homes at varying price points. Those involved in alternative investments such as real estate are increasingly choosing to work with specialists who convert raw land to housing that is built on strategically purchasing property that is well-suited for use designation changes. With permission from local planning authorities, the land can then receive infrastructure additions that homebuilders need. But any land investment – whether done independent or with UK property fund partners – remains a calculated risk, one that an individual investor should discuss with an independent financial planner.

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