5 Impacts on the Housing Market from COP26
COP26 came and went but it has left asking what the findings mean for the housing market? Making net-zero goals a reality isn’t just down to real estate, but it would be naïve to think that it doesn’t have a huge part to play in it.
1. The built environment currently accounts for almost 40% of carbon emissions.
This means those city areas, such as London and Birmingham, need to aim to be more than just concrete jungles. In order to cool cities and help lessen air pollution, developers need to ensure they are also increasing green spaces and planting more trees. Simple things in the planning process can also help alleviate using excessive concrete. Sustainable drainage features and grass roofs are just two ideas that will go a long way in being more environmentally friendly.
There are considerable economic benefits from creating greener cities, such as healthier populations and more sustainability-linked jobs.
2. Building developments are responsible for 50% of raw materials consumed globally.
This percentage is huge. What’s even more concerning is that around 70% of buildings that will exist in 2050 have already been built. This means developers need to ensure that through their constructions, both past and present, they are contributing to the goal of cutting emissions by 50% by 2030 - and be net-zero by 2050 to keep in line with the Paris Agreement. Things like retrofitting are making building operations more energy efficient.
Retrofitting is the addition of new technology or features to older systems. Circular economy principles around recycling materials, eliminating waste, and regenerating nature is also proving more popular.
3. Around 500 billion pounds of sustainable and green debt was issued globally in 2020.
It’s simple: Going green makes business sense.
34% of homeowners and 43% of investors have green leases in place, with them becoming more and more popular. Any buildings that aren’t proving to be moving more towards energy efficiency face a ‘brown discount’ with potentially lower rents and therefore, less profit for the landlords. Not only this, but landlords also risk longer vacancy periods compared to buildings that are considered more green.
4. The average UK household emits 2.7 tonnes of CO2 every year.
With the government aiming for all new homes to produce 80% less carbon than they do currently, by 2025, there really is such an emphasis on new builds being highly energy-efficient. The government has released schemes such as the Green Home Grants Scheme (July 2020) to help households become more energy-efficient. This scheme allowed homeowners to apply for and receive a voucher for up to £5k to help cover up to two-thirds of the cost of installing green upgrades. However, the scheme has now been scrapped with many calling it a huge failure. Time will tell what the government will do to fix this,
To read more about the failed scheme, click here.
5. Up to 8 million properties in England and Wales could be at risk of subsidence.
As the climate warms, the threat of ground collapse grows due to higher rainfall. Sinkholes from former working mines are becoming more common, meaning buyers must ensure they are receiving accurate land data during property transactions. However, this isn't the biggest concern for the UK:
The biggest challenge the UK faces in terms of the changing climate is the rising sea levels. Coastal flooding has been one of the highest priority risks in the UK for quite some time. Extreme rainfall results in a huge increase in surface, river and groundwater flooding. Alongside this, sea level rises and storms becoming more and more frequent which is affecting coastal towns specifically.
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