I just read that the HIPs scheme including complusory Energy Rating reports on all houses offered for sale, is due to begin this June. It was scheduled for last year but was scandalously dropped by the govt, after many of the new breed of HIPs/Energy assessors had spent good money getting trained. Now it seems it's back - or is this a false report?

Such Energy Rating is reqd by EC, not only for houses offered for sale, but for rent too. Because our govt has dragged its heels on the former, and hasn't even begun on the latter, the EC is now prosecuting UK. It's also reqd for commercial and public buildings and UK has indeed got that going, and is expected to reduce the floor area threshold progressively. Certificates will shortly be displayed in hotel lobbys, office receptions etc.

This is extremely important and promises to be far more effective than Building Regs, Kyoto etc, in creating widespread energy measures. Once Middle England gets familiar with these bits of paper that certify just how many £10k's this house is going to cost to heat over a medium term, compared with that one, then the extra-over will get knocked off houses' values. The more so, as fuel prices go up. The world system has somehow managed to get fuel prices back down again, since Katrina, so business-as-usual can continue - but for how long? Maybe next winter the Russians will turn the screw, just as the journalists begin to realise what Energy Reporting could mean to Middle England's pockets. It's amazing how last year's wacky idea becomes this year's conventional wisdom, once it hits the Mail's personal finance pages.

Given rising fuel prices, the effect will be a 2-tier property market. The very highest rated buildings, domestic or commercial/public, home-owned or rented, will rise strongly in value, compared to the average to low, which will level off or drop in value. The best will continue to rise even, or particularly, in the inevitable, well-overdue property slump. The worst will become unsaleable at any more than site value. There will be a new negative-equity crisis, and the underclass will be saddled with the low-value housing that's impossible to heat without subsidy. Values won't so much reflect the current Energy Rating, but the building's potential energy-improvability, which is at present not so obvious as a criterion. I'm advising my clients to get shot of their houses while the going's good, if it doesn't seem readily improveabvle, and buy something that is.

What does the team think?

Kit,
>global warming will offset the extra cost per unit of heat, by displacing that heat input in the first place due to reducing deltaT<
I wonder, maybe so.
It's heating-season degree-days that count. How is that expected to change - anyone know?
Against that, it's going to be more windy, wintertime, isn't it? That means more wind-chill and more airchange. Also wetter, so more evaporative cooling.

All those value factors apply now; I'm saying there's a new and additional factor coming in, which will have an effect on top of (not swamped by) the existing ones, for better or worse. In fact, the biggest hit, proportionately, will be on the value of not-so-desirable properties whose base value isn't jacked up by other factors.

This adds up to a new opportunity for property developers (that includes anyone doing up their own home and looking at its resultant value). Whereas at present it's generally true that there's no great profit in buying cheap/improving/selling quick an existing single house (or flat), this limitation will change when figuring in the potential great value uplift resulting from creating a top-energy-rated unit for sale.

I don't think energy labels on their own will change much, at least in the private domestic sector, but could if reinforced with regulations, eg: that an EPC’s list of recommended energy-saving measures be made compulsory minimum requirements before the sale of any property. I conducted a survey for my thesis last year and around 30% of respondents from Area X agreed with this suggestion. A further 43% of respondents agreed with this proposal but thought that it would be fairer if subsidised by the state.

Posted By: GuestI don't think energy labels on their own will change much, at least in the private domestic sector, but could if reinforced with regulations, eg: that an EPC’s list of recommended energy-saving measures be made compulsory minimum requirements before the sale of any property. I conducted a survey for my thesis last year and around 30% of respondents from Area X agreed with this suggestion. A further 43% of respondents agreed with this proposal but thought that it would be fairer if subsidised by the state.

The problem with this approach is that if you are selling a property for modernisation or even demolition you are going to have insulate it first.

Tacking the EPC on to mortgage surveys wll not work either as these are not a legal requirement and not everyone takes out a mortgage to purchase a property.

I think the approach of EPC's and building regs on upgrades is a good one. But to really kick things off energy saving measures should either be grant aided or tax deductible against income tax.

I agree with carrots rather than sticks at this stage and phase in the regs on upgrades whilst building up a comprehensive database of the existing stocks EP over the next 10-15 years or so as properties change hands. Then prescriptive measures could be demanded from the real worst performing stock

Sadly probably not far from the truth Keith.
If you take a slightly extreme view on the short to medium term changes that could occur due to increasing energy costs, I think that most sensible people will not be concerning themselves with bits of paper, but rather looking at the real practical issues. Mind you all that paperwork would probably heat your house for a few months

fostertom, i am very impressed with you knowledge and balanced approach to the topic, see my comments under domestic energy certificates (building regs.). the software is designed to deal with the vast majority of 'normal' houses in this country i.e the worst ones, and not wacky ones like keiths! it will take 10 years for a substantial database to be constucted and the software to be developed to take account of a wide range of variations. the main role of DECs in the interim will be about building general public awareness. the main point that i made in my earlier comments is that people carrying out their own improvements will now need to keep arecord of what they have done because the inspector can only survey/record what he sees and/or has evidence for. i will be doing some assessments for real soon so will report back in due course on how it goes.

'real expert' ( very expensive for a single household) or not, an energy assessment just looking at volume, construction, plant etc will never mean much without a pressure test and i can not see that being feasible on most old buildings.

How do you know my house is whacky Ken?

I foresee these energy certificates as a charter for demolition of old traditional buildings in favour of egg boxes and a charter for gas and nuclear energy (via heat pump systems) over saving energy and being frugal.