Topping out

Gerald Cole

Green homes

Are they our best ever investment?

When my parents built their first – and, as it happened, only – house in the early 1950s, construction materials were in short supply, tradespeople hard to find and supply lines disrupted by war. Sound familiar?

Nevertheless their builder managed to scavenge enough to construct a threebedroom house with single-leaf brick walls, galvanised steel single-glazed windows and an insulation-free attic.

Over the next 40 years a gas cooker and central heating were added, but it was only when ill health prompted a move that my parents were persuaded to carry out a loft conversion to boost their sale price and better afford somewhere smaller and more easily managed.

Why am I telling you this? Because it recalls a time – and an attitude – when British houses were primarily for living in, possibly for a lifetime. They were not, as they have become since the 1970s, hugely profitable investment opportunities, pension substitutes or valued inheritances.

Today, of course, opportunities for home improvement are greater than ever before. But they are typically viewed – and marketed – through a financial lens: will my new kitchen, extension or loft conversion add value to my property?

The last two years have added two new perspectives. The first was Covid and the need to find workspace at home. The second, much more serious, is the explosion in energy prices. Suddenly home heating is unaffordable for many households and, at the time of writing, only shortterm solutions are being discussed.

But the long-term solution – simply reducing energy requirements – has been known for a long time. And for the first time investment in it is the most costeffective home improvement you can make.

So how do you do it? For a low-energy self build, the best established method is to use Passivhaus principles. These were developed in Germany in the 1990s as a way of dramatically reducing the energy used to heat and cool buildings. They do it by enclosing a house in large amounts of insulation and an airtight envelope.

It might sound like a recipe for an explosion of mould or boiling to death in a summer like the last. But it also depends on two other factors: constant, low-pressure ventilation, through a network of hidden ducts, and orientation. Passive houses are sited to take advantage of summer sun and minimise heat loss in winter with only small north-facing windows.

The result is a home that can cut average energy use by up to 85 per cent, heating itself from washing, cooking, occupants’ bodies and warmth recovered from exiting air.

It’s claimed that a Passivhaus approach only adds around ten per cent to average build costs, but that depends on scrupulous modelling, using the Passivhaus Planning Package – and equally scrupulous construction methods, so experienced designers and builders are essential.

For renovators, a more flexible version known as EnerPHit is used to upgrade existing homes. For more information see the Passivhaus Trust (


If you can build, or already own, a south-facing roof, fitting a typical four-kilowatt photovoltaic (PV) panel system can generate 3,600W a year – more than enough to meet the average household’s electrical needs, according to GoodWe UK.

Sunlight, however, is intermittent and seasonal. But power can be stored, either in home batteries or, more cheaply, via an immersion heater in the over-sized hot water cylinders required by low-temperature central heating systems, such as heat pumps.

PV panels are now VAT free and getting cheaper, down from around £6,000 five years ago to between £4,000 and £5,000 today, but galloping energy bills are making a dramatic improvement to payback periods. In January the Energy Saving Trust estimated it would take between 11 and 27 years to recoup installation costs. By August the Eco Experts, a PV panel comparison website, claimed it could now be just six years.

For renovators a range of energysaving devices and measures are now VAT-free, including air- and groundsource heat pumps, insulation and heating controls. Again, payback periods are dropping steeply, according to recent analysis by the Sunday Times.

Last January the cost of loft insulation would take 13½ years to recoup. By the end of this year it will take just four. Similarly, cavity wall insulation payback falls from 14½ years to 10½. Payback for solid wall insulation plummets from over 50 years to 16½.

Already this is affecting property values. According to property website Rightmove, improving the rating of a home’s Energy Performance Certificate (EPC) can add 16 per cent to its value. EPCs – rated from A to G – measure, in a fairly basic way, a property’s energy efficiency. They also suggest improvements and their likely cost savings.

An EPC is a legal requirement for any property when it’s built or sold. Currently the government would like all homes to achieve at least a C rating by 2035. It would also like all mortgage lenders to have an average C rating across their portfolio of properties.

For the time being, however, several major lenders offer ‘green’ mortgages, including NatWest, Nationwide and Virgin Money. These provide cashbacks or reduced interest rates for properties with A or B EPC ratings, or preferential rates on additional ‘green’ borrowing for existing customers. The sums involved, however, are relatively small but, as the value of ‘green’ homes increases, expect more enticing offers.

Other suggestions include lower council tax and reduced stamp duty for high EPC properties. So if you build or renovate, make low energy a priority, even if it means postponing more common home improvements. They can be bought later with the continuing savings you make.