Simon Bones, founder & CEO of Genous, discusses the shift towards sustainability in developments and why developers should get ahead with this now
Housebuilders and developers have tended to view sustainability from the perspective of legislative requirements – what do we have to do to get properties approved – rather than as a differentiator for customers and in their business approaches.
While the Future Homes Standard pushes the sustainability legislative ask even further, that doesn’t mean the right response is to continue delivering only the minimum requirements.
On the contrary, we think the standards reflect a broader shift in consumer sentiment and an opportunity for forward-thinking housebuilders to differentiate themselves both against direct competitors and against existing housing stock: rather than characterless vs character properties, reframing the narrative as cutting-edge vs out-of-date.
The customer perspective
First up, though, what are we talking about when we think about communicating sustainability to customers?
There are three things to think about: (1) electrification; (2) ventilation; and (3) climate-resilience. We don’t think that embedded carbon is something that customers are ready to care about the same way, since this doesn’t change how the property gets used, while insulation (to reduce heat losses) is already well built into the system and presents a limited opportunity to differentiate either on carbon or bill savings compared to the three here.
Home electrification
Solar photovoltaics (not solar thermal, which has poor payback and other characteristics), home battery storage, heat pumps, EV chargers and (though not an infrastructure characteristic) time-of-use electricity tariffs are the key ingredients of an electrified home.
While it is possible to implement these individually, there is a benefit in doing them all together. The solar generates power that can be stored in the battery or used by the heat pump, while the battery and time-of-use tariff lower the heat pump’s cost, and the EV charger facilitates the shift to lower-cost, greener transport (with time-of-use giving a further boost here).
So, how to differentiate here? Going bigger than the government’s 40% ground-floor-area target for solar, running efficient heat pumps (rather than cheap heat pumps) at a low flow temperature and putting in batteries and EV chargers presents an opportunity to reduce bills for the homeowner (zero bills is feasible for a well-designed property here, aside from car charging) and to reduce emissions. Going three-phase for larger properties from the outset also gives more headroom and less worry about upgrade requirements.
Ventilation
Air-tightness requirements are likely to create challenges for construction techniques and quality, but mechanical ventilation with heat recovery (MVHR) is both a likely prerequisite and a differentiator for air quality and home comfort. While some technologies don’t get strong positive responses from customers, almost everyone with a working MVHR we talk to says they would want that technology in future properties. That builds differentiation for the new vs existing property decision-making and gives a chance not just to talk about being future-proofed but of improved home comfort.
Climate-resilience
Britain is getting hotter, and people living in properties that get too warm in summer are looking for solutions. Thoughtful design to reduce solar gain in peak seasons, good insulation and MVHR to minimise heat transfer into the property, and the potential integration of cooling technologies with solar photovoltaics to enable green cooling, all allow a well-conceived new build not only to be warmer in the winter but also cooler in the summer. Again, this is something that can be sold to an increasingly heat-fatigued market.
Compliance and approvals
Customers care about bills, home comfort, and (sometimes) emissions, but communicating the benefits of these sustainability measures to a broader audience is also important for planning, utility sign-off, and CSR.
EPCs are changing with the advent of the Home Energy Model (HEM), but the direction of travel aligns with what we have been discussing, and recently built properties with electrification technologies are already regularly achieving EPC A.
We expect this to continue in the new world as, of the various future HEM metrics, fabric performance will be strong for all new builds (and lacks a good opportunity to differentiate), while appropriate optimisation of the heating system (as outlined earlier) should give better results here, and smart readiness should present even better differentiations, all of which will feed into the ultimate energy cost metric.
If properties being constructed are high-performing in EPCs and can be shown to be greener than alternatives, this should help with some more marginal planning applications. Minimising flows into and out of the property could also, through intelligent design, reduce the electrical infrastructure reinforcement costs imposed on the developer.
How to deliver sustainability in developments
Experts in renewables are typically involved in the retrofit space rather than the volume new-build space, while architects, M&E consultants and masterplan designers often lack the insights needed to optimise developments.
For the first of these, the tough increases in Minimum Energy Efficiency Standards for landlords, coupled with upgrade programmes directly supported by or planned to be facilitated by the Warm Homes Plan, will also tighten supply over the coming years. Housebuilders and developers wanting to get in early will need to build alliances early before supply chains tighten. Further, integrating renewables insight with development planning is better done sooner rather than waiting until FHS bites.
Consumers are increasingly looking for comfortable, low-bill/emissions properties that are climate resilient, and both the legislative environment and the increased transparency and knowledge that new measurements and compliance regimes will bring in make for an opportunity for forward-thinking developers and housebuilders to benefit from these changes rather than simply respond to the changing standards that they are required to meet.
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