France : the indication of the energy efficiency class of the real estate property becomes compulsory
Specifying the energy efficiency class of a real estate property for sale was already compulsory in France. From 1st January 2011, property sellers will be obliged to indicate the energy efficiency class of homes for sale in France – with the letters from A to G, from the best to the worst category, depending on energy consumption – in all of real estate adverts published in newspapers or websites or shown in the windows of real estate agencies.
Besides the impact on the environment, this new measure will also influence the level of prices of houses and apartments. Home buyers will surely ask for a discount on the valuation of the property for sale from the beginning of the negotiation.
Benoit Fauchard – the person responsible for sustainable development of FNAIM, the Fédération NAtionale de l’IMmobilier – expects a cutback in quotations comprised between 10% and 15% and a fall in rental prices for properties that have the worst energy consumption performances. This new measure will prevent home buyers from purchasing a dwelling for which they should bear the cost of a renovation to reduce energy consumption. In short, home buyers will be able to avoid “swindles”.
The measure – that has been introduced by the Loi Grenelle 2, the Law 2010-788 of 12th July 2010 – aims at pressing home owners to carry out the necessary works to reduce energy consumption and keep up with advances in energy efficiency.
The problem of energy consumption in old buildings is very serious in France and in its capital city in particular. Old buildings alone in Paris generate 21% of CO2 emissions, which means 43% of the total energy consumption reported in France. According to the Agence nationale de l’habitat, 2.8 million flats belonged to F category and 4.7 million apartments belonged to G category, at the end of 2007.
Experts say that tenants will choose properties with higher rents but with lower energy consumption instead of homes with lower rents but with higher expenses. Consumptions are higher in buildings that were built between 1955 and 1974 and in homes in comparison with apartments.
The sale of newly-built homes in France increased by 7.6% in the second quarter of 2010 in comparison with the same period of 2009. Prices rose by 5.4% in the second quarter of 2010, reaching 3356 euros per square metre.
Sustainability and environmental issues cause concern for commercial property tenants in the UK, too. The Occupier Satisfaction Survey 2010 report published by the Property Industry Alliance indicates that they are only moderately satisfied with the service landlords supply in the field of sustainability. Sustainability has become a key issue for occupiers. They expect landlords to engage more on environmental issues and firmly wish to work in partnership with home owners to take common useful initiatives. The question is whether occupiers will be willing to pay for green buildings.
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