Delivering energy efficient homes for the PRS
October 25, 2013
At Climate Energy Homes we believe everybody has the right to a decent home – a well designed, well built and well insulated home that doesn’t cost the earth to heat and power.
We have specifically targeted the rental sector, both affordable and private, as we believe long-term investors are inherently more interested in sustainability from a quality and affordability perspective.
Climate Energy Homes is the result of 12 years work developing and refining our innovative and unique ecoTECH build system and a partnership with the Climate Energy Group and Climate Change Capital. Our pre-certified build system, using our own structural, super insulated panels, is purpose designed to meet Code for Sustainable Homes Level 4, 5 & 6 and the proposed Zero Carbon Homes standard. We will be able to meet these standards at a lower cost than, and in a build time around half that of, traditional construction methods.
Our system offers a rapid and cost-effective solution to procurement and supply as well as having wider benefits for individuals, communities, the environment and the economy.
The affordable housing sector already recognises the value of quality construction that is built to last, and is increasingly recognising that sustainable design and construction improves the quality of life for tenants, whilst reducing the cost of living and fuel poverty.
We are working closely with a number of registered providers and are currently providing a full ‘turn-key’ developer service on a site in Rainham, East London. We are looking to deliver 51 houses and flats, all designed to meet Passive House standards, for Circle Housing on land acquired from the Greater London Authority. Foundations are currently going in and we will be erecting the build system from early November with the first units being completed prior to Christmas.
Circle Housing recognizes that energy savings of up to 70% will have a significant impact on the lifestyle, health and wellbeing of their tenants as well as reducing their own need to retrofit properties in the future. Former Housing Minister, Mark Prisk had also taken a particular interest in the Rainham scheme, looking to use it as a showcase for off-site construction.
By comparison, Private Rented Sector (PRS) tenants can often be seen to be getting a poor deal. There are exceptions but for many the build and environmental quality of the rental properties on offer meets only the basic minimum building regulation standards. It is often that sustainability is judged to be an expensive luxury that would eat into profit.
But now the characteristics of the PRS are changing, with more living in the sector, and for longer periods, as well as an increasing number of those being households with children there is an increasing demand for properties that will not eat into income. In March 2013 the housing charity Shelter advised that ‘the PRS does not always provide families with the stability they need, and too often standards are not up to scratch.’
According to DCLG figures, 67% of families in the PRS moved house in the last three years. In the last year alone 30% of families with children had moved home. In comparison, just 3% of home owning families with children moved house last year.
We support the principle of Eric Pickle’s Tenants Charter but believe that longer leases and more transparent contracts must be aligned with better quality homes. With families forming the fastest growing group in the PRS, and rising energy costs rarely out of the news, there is a real concern that more and more families will be drawn into fuel poverty.
As we are demonstrating in Rainham, it does not need to cost more to build energy efficient homes and we believe that PRS landlords who offer high quality, purpose built energy efficient homes will have a significant advantage in the market.
We are sure that in time the demand to rent a new ecoTECH building will drive a rental premium that is more aligned towards a ‘lifestyle’ proposition, rather than simply a functional utility with a 70% saving on energy costs. We are also confident that tenant loyalty will be stronger, voids and repair bills lower and, as a result, yields will be higher. We see this as a win-win for landlords and tenants.
This is certainly a factor that is recognised by investors in the PRS fund we are currently establishing and having managed by our partners Climate Change Capital. Also, our unique proposal was undoubtedly a key factor in Climate Energy Homes being one of the 40 developers selected in the first round of the Government’s Build to Rent scheme.
Indeed we believe we are the only developer in the programme actively promoting both social and private rental schemes as we are working closely with both the Homes and Communities Agency (HCA) and the government’s PRS taskforce to bring forward a portfolio of sites across the Midlands and East Anglia. We fully expect to feature in round 2 of the fund.
Whilst the number of properties in the pipeline will be a key focal point for the media, and high volume is something a small developer like ourself is unlikely to provide, I believe that the taskforce is keen to ensure that the programme actively supports new entrants and new investment models.
We have big ambitions and don’t expect to be a small developer for long. We are talking to a growing number of registered providers and house-builders keen to work with us and we hope to be able to help provide a cost effective and eco-friendly solution to Britain’s housing shortage.
Climate Energy Homes