Data is key in reducing our carbon footprint

Article originally published in The Intermediary June 2024 – page 89

How the UK is set to decarbonise its residential housing stock has been a contentious subject over the past 12 months. A sustained period of very high inflation, rising rents and voters disgruntled with the state of play in Whitehall, prompted the Prime Minister to stall policies designed to reduce the sector’s carbon output in September.

Following that decision, the Climate Change Committee (CCC) warned parliament that while a 2035 phase-out date for fossil boilers is “potentially compatible” with net zero targets, exempting a fifth of households from meeting those standards “creates widespread uncertainty for consumers and supply chains”.

Added to this challenge is the fact that there is insufficient budget to fund household grants to pay for heat pumps. Despite hiking the grant from £5,000 to £7,500, the overall budget remained the same, meaning fewer households will have access to support.

According to the CCC, this means “a marked increase in risks to buildings decarbonisation”.

For lenders, this policy shift is not encouraging. Renters will not now save several hundred pounds on energy bills a year according to government estimates. That has an impact on their disposable income, increasing the risk of rent arrears.

The condition of homes exposed to climate risk, including flooding, heat damage, soil shrinkage and subsidence is already a concern for lenders looking at property valuations.

As a market leader for Retrofit Assessment, design and co-ordination, we welcomed in March the Royal Institution of Chartered Surveyors publication of its long-awaited residential retrofit standard, a series of concise mandatory and recommended requirements and effective from 31 October 2024.

One of the biggest challenges when it comes to improving British homes’ energy efficiency is the diversity of housing stock. There is no one size fits all.

Retrofitting homes with the best of intentions could actually damage them, with the obvious knock-on effect that has on condition and value.

According to the Climate Change Committee, in order to meet net zero targets – legally enforceable – half a million homes need to be retrofitted every year from next year. By 2030, that rate rises to 1 million homes a year.

The role of surveyors in delivering on this cannot be underestimated – accurate assessment of the best approach to retrofitting specific properties is crucial to protect value, and ultimately lenders’ balance sheets. Capacity is challenging however, and that’s where the industry needs to get smarter about how data supports this transition. At CoreLogic we’ve been working on this for years now and we’ve just taken another significant step on that journey, completing our acquisition of Parity Projects.

Parity is a leading expert in the domestic housing retrofit sector, providing retrofit advisory services, tools and data. Having collaborated with Parity Projects for a number of years, we know how positive this will be both for our business and importantly for our customers.

Better use of data is instrumental in providing expertise and tools that enable stakeholders to reduce the carbon footprint of building projects. Parity Projects uses data science, proprietary software and analysis to help clients deliver energy efficiency competently and effectively. The team works with local authorities and landlords of every size, mortgage providers and private homeowners to develop cost-effective retrofit programmes.

This will further enhance the retrofit services that CoreLogic currently offers, with a key focus on providing our clients with the ability to analyse address level data to identify and assess and model properties that should be targeted for retrofit measures.

What the RICS residential retrofit standard means

The RICS member’s overriding duty in retrofit projects is to improve the energy efficiency of dwellings by undertaking their professional duties to the required standard. Retrofit improvements in dwellings will likely include:

• Identifying defects (especially if the project is for a special property) that require attention before installation of energy efficiency measures and arranging for their satisfactory repair.
• Improving levels of insulation, air tightness, the supply of ventilation (controlled and uncontrolled) in the dwelling, internal air quality and managing hazards such as volatile organic compounds.
• Identifying defects – especially if the project is for a speacial property – that require attention before installation of energy efficiency measures and arranging for thier satisfactory repair.
• Improving levels of insulation, airtightness, the supply of ventilation – controlled and uncontrolled – in the dwelling , internal air quality and managing hazards such as volatile organic compounds.
• Managing moisture in the dwelling, including preventing weather resistance.
• Installing efficient heating and cooling systems and reducing the risks of overheating.
• Provision of efficient water heating and lighting systems and other equipment and appliances.
• Installing efficient energy control, metering and monitoring systems and low and zero carbon technologies.