Are you thinking of extending your property? Did you know you could add space, value AND combat global warming all at the same time? In this exclusive piece for World Green Building Week, WorldGBC’s James Drinkwater and Judit Kimpian of Architects’ Council of Europe explain how ‘green mortgages’ and value adding extensions could be a winning combination.
“There’s no place like home” they say. For many of us, our homes are also our most important financial investment, with increasing numbers of people looking to save for their pension through property. But did you know they are also often your most environmentally costly possession?
Energy use in Europe’s homes is responsible for around 25 percent of all greenhouse gas emissions in Europe – a more significant contribution to climate change than either cars or flying make. Across the EU, roughly 97 percent of our buildings are not energy efficient, and to meet our climate targets we’d need to be renovating and upgrading almost 23,000 homes a day until 2050. You’ve already upgraded your old polluting car, but what are you going to do about the inefficient home you’re running?
Whether you’re a family or commercial property owner, at some point you probably have considered how you can add value to a new or existing property through renovating and extending. However, statistics on the low number of deep energy efficiency renovations show you’re unlikely to have considered doing this at the same time. But that may be about to change, with the help of Europe’s mortgage banks.
A report released this week by the World Green Building Council, with the support of the Architects Council of Europe, sets out a vision for how mortgage banks can qualify borrowers for a better mortgage deal if they improve the property’s energy performance. And banks are already starting to investigate the idea, with over 40 major banks joining a pilot run by the European Mortgage Federation to investigate how the report’s proposals can be applied to their business.
So why are banks doing this? In short, it’s because it makes business sense for banks and borrowers to future-proof their investments. There’s a clear link between saving money on your energy bill and having more in your pockets to pay your bank back, so that’s a clear win-win for bank and borrower.
Research efforts by the Architects Council of Europe and its partners, such as the ABRACADABRA project, have also shown how redesigning dwellings to better meet occupant needs and increase usable area via extensions, including rooftop additions, are a fantastic way to add value to a property and make the economics of a deep energy refurbishment work. This news will be welcomed by banks looking to launch green mortgages, as one of the keys to unlocking a better green mortgage deal is to show how your improvements can improve the loan to value ratio on your property. More usable area and better indoor comfort are amongst the most important value drivers for people renovating their homes.
More widely rooftop additions have been proposed as a potential solution to housing crises in cities, helping regenerate and improve the aesthetic of urban areas. There are a number of new low carbon solutions for such projects that are increasing in popularity with property owners and architects alike, such as the cross laminated timber used for the Coombe Road, UK project (see image above). Projects are increasingly using rooftop extensions to help finance the energy and comfort upgrade of existing properties.
In the near future, considering energy improvements and a rooftop extension in your property could be your way to maximise its long-term value and save interest on your mortgage. And did we mention you’d be reducing Europe’s largest source of greenhouse gas emissions at the same time?
James Drinkwater is Director of WorldGBC’s Europe Regional Network; Judit Kimpian is Chair – Sustainability Group at the Architects’ Council of Europe.
For more information, download WorldGBC’s new report on green mortgages and explore the ABRACADABRA project’s research on enhancing property value and reducing energy consumption.
To learn more about the financial, technical and legal possibilities of carrying out an energy renovation with adding more space to your building, consult ABRACADABRA’s three tools: http://www.abracadabra-project.eu/case-studies/
Below: Credit: Krydsrum Architects