BackWeigh climate considerations before purchasing that home
Housing markets have been getting impacted by the phenomenon
PremiumThere’s lots to consider when buying a house: Is it in a good location? Does it have enough storage? How new is the kitchen? But there’s one vitally important question which should be at the heart of any property hunt: How will this home fare in the climate-crisis era?
There’s a growing awareness among realtors that climate is fast becoming a bigger consideration in property investment. Mike Holden, divisional director of growth at property data business Landmark Information Group, tells me there’s a generational divide, with younger people more attuned to climate risks while oldsters are still willing to pay a premium for drafty inefficient homes provided they tick the rest of the buyer’s boxes.
There are financial benefits to including climate in a property buying decision, whether that’s keeping insurance premiums and energy costs down, avoiding costly repairs or maintaining resale value. As the next generation starts getting on the property ladder, sustainability is likely to have a growing impact on prices.
I’m in the privileged position of searching for a first home of my own and, as someone who writes about the climate crisis for a living, it’s been top of mind in two ways. The first is the physical risks. While my partner admired the new carpets in a cosy basement flat, I fretted over whether it was at risk of flooding. When we visited top-floor flats, I worried about overheating, a potential problem for a third of England’s housing stock according to a report from the Resolution Foundation.
Another property previously suffered subsidence, something more likely to happen as hot, dry summers cause the ground to shrink and crack. The British Geological Society predicts that millions more homes will face this expensive structural challenge by 2070, with London particularly vulnerable.
The second thing issue is what improvements we’d have to make to reduce our home’s environmental impact. In the UK, any home for sale or rent has to get an energy performance certificate. Assigned by a licensed home inspector, it comes with a rating, from G (least efficient) to A (most efficient), and recommends steps that the homeowner should take to improve the score, such as installing ceiling insulation or upgrading the boiler. It’s been eye-opening. We viewed one lovely flat with an EPC rating of E. To bring it up to its maximum potential of B would cost tens of thousands of pounds. It probably needs doing—there’s a proposed bill working its way through the UK parliament that would mandate an EPC rating of C or above for all owner-occupied homes by 2033 — but as first-time buyers, we simply don’t have the capital.
However, it appears I’m still in a minority in asking these questions. Hordes are still moving to locations within the Sun Belt in the US, on the frontline of strengthening hurricanes, flooding and extreme heat waves. That will soon have financial consequences: Just look at Florida, which is in crisis as insurers flee the state and premiums soar. Research in the Netherlands shows that homes with a high potential for flooding aren’t cheaper than lower-risk homes, potentially because living near water is seen as a perk. It’s only when there’s been a flood recently that property prices are hurt. Likewise, in the UK, Holden says that estate agents aren’t currently seeing energy performance affecting property values.
So how should you incorporate climate risks when buying? Do as much research as you can. Study the details of the energy performance certificate. Check if the property is on a floodplain. When it’s time to proceed with an offer, a solicitor can advise you on anything they discover that might impact your future ownership; in April, the Law Society of England and Wales confirmed that the buyers’ conveyancing solicitors have a duty to advise on climate legal risks. The Law Society requires an environmental search, but you might request a specific climate-change report from your conveyancer that gives a forward-looking analysis of potential dangers based on climate projections.
Meanwhile, some surveyors now offer services such as a retrofit assessment, which are more in-depth than an EPC and can give more detail on how to make your prospective new home more energy efficient. Of course, climate considerations aren’t the be all and end all of such an important decision.
I’m not choosing a place to live based purely on its climate resilience. It was the way the place I’ve ended up falling in love with felt like home already that got me. But I’m reassured by the knowledge that it isn’t at risk of disappearing underwater, and only needs small updates to improve its energy efficiency. ©bloomberg
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