The H2020 REVALUE project has finished. Over the past 4 years, the project partners researched the relation between the value of residential real estate and its energy efficiency. A greater awareness of what investments could improve both a property’s energy efficiency and its value would help to build a business case that could accelerate energy efficiency improvements in Europe´s housing stock. Much of Europe’s housing stock is currently both aged and energy inefficient. Meanwhile, today’s rate of replacement/upgrade is low (between 1-2% per annum)
Without drastic changes, key European policy targets will not be met. But achieving the desired market transformation is complex and requires actions and financial commitment from many stakeholders in the housing market. Establishing a convincing business case that provides incentives to investors, inhabitants and financiers could help drive that change.
The REVALUE team’s research is built on gathering and analysing data (over 200.000 unique data sets were used) in relation to residential portfolios owned by housing providers in four European countries (the UK, the Netherlands, Germany and Sweden). The information gathered has been both quantitative (regression analysis) and qualitative (interviews, case studies and roundtable meetings).
On the 1st of October 2018, the REVALUE team will present its final results to professional stakeholders in a dedicated conference at the Savills’ head office in London.
Although further research is required, a number of issues were highlighted in the project’s final reports:
- There is no linear relation between energy performance of dwellings and their value. Other components still largely determine value (location, size, etc.). Energy inefficient dwellings were assumed to have an added risk component but this is not yet expressed in the value of dwellings.
- The REVALUE research seemed to indicate that energy efficiency is increasingly considered important by stakeholders in housing.
- Valuers do not drive prices, they only report on market-based evidence.
- There is growing transparency and awareness of energy efficiency. Part of this growing awareness has been reflected in the new RICS Red Book (2017). A RICS insight paper on energy efficiency in residential real estate is due to be issued by the end of 2018.