Putting a value on improved BER ratings

marathonic

Assuming the figures above hold true, what value would you place on a 3-bedroom semi-detached house of 100 square metres in size if it was rated at A2 over the value if it was rated at C1 assuming the house is otherwise identical?

The energy savings equate to €50 per month.

If you use the 10-year payback a lot of people refer to, it'd only be worth an extra €6,000.

However, the €50 per month savings would pay interest and capital on a €10,565 mortgage over 30 years at KBC's current rate of 3.85%.

It would cover the interest only portion of a €15,585 mortgage at the same rate.

In retirement, it would take a €15,000 pension pot (in todays money) to cover the additional €600 annual energy costs (also in todays money) at a 4% annuity rate.

I believe that the new building regulations mean that houses will now fall into the "A" BER ratings and I've read estimates that a new build to meet the regulations costs about €10 per square foot more than a new build built to meet the previous set of regulations.

As 100 square metres equates to 1,076 sqare feet, this suggests that the new build would cost an additional €10,760. To me, this represents good value. Obviously, property developers would be adding an element of profit to the above cost so one might expect to spend €15,000 - €20,000 extra just to cover the new regulations.

Obviusly there is no choice in the matter for those seeking planning permission in the future but what are your thoughts on the numbers? Would you have paid the extra if the additional energy efficiency measures weren't required by law?

marathonic

I suppose you could think about this from the perspective of a landlord too - is a tenant likely to stump up anywhere near an additional €50 per month to cover the additional costs.

I would think that, despite the tenant making equivelant savings in their energy bills, this is unlikely. I would, however, expect the landlord to have an easier time finding tenants in the first place - so it may pay for itself through reduced void periods.

MicktheMan

A flaw in your argument -

as there is no requirement for quantitative testing of houses wrt energy use by the BER assessor, there is no guarantee that the A or C rated house will, in fact, perform as an A or C rated house.

murphaph

Yep, the BER is an educated guess and no more. An A1 rated house could be dreadfully draughty if the workmanship was poor.

The_Conductor

Unfortunately- something as simple as changing light bulbs can markedly effect a BER rating. You can get thermal evaluations- which are a far more accurate evaluation of the thermal efficiency of a property, than is a BER- however, they are normally significantly more costly to do than a BER (though of far more use).

ted1

marathonic wrote: »

Assuming the figures above hold true, what value would you place on a 3-bedroom semi-detached house of 100 square metres in size if it was rated at A2 over the value if it was rated at C1 assuming the house is otherwise identical?

The energy savings equate to €50 per month.

If you use the 10-year payback a lot of people refer to, it'd only be worth an extra €6,000.

However, the €50 per month savings would pay interest and capital on a €10,565 mortgage over 30 years at KBC's current rate of 3.85%.

It would cover the interest only portion of a €15,585 mortgage at the same rate.

In retirement, it would take a €15,000 pension pot (in todays money) to cover the additional €600 annual energy costs (also in todays money) at a 4% annuity rate.

I believe that the new building regulations mean that houses will now fall into the "A" BER ratings and I've read estimates that a new build to meet the regulations costs about €10 per square foot more than a new build built to meet the previous set of regulations.

As 100 square metres equates to 1,076 sqare feet, this suggests that the new build would cost an additional €10,760. To me, this represents good value. Obviously, property developers would be adding an element of profit to the above cost so one might expect to spend €15,000 - €20,000 extra just to cover the new regulations.

Obviusly there is no choice in the matter for those seeking planning permission in the future but what are your thoughts on the numbers? Would you have paid the extra if the additional energy efficiency measures weren't required by law?

From my experience I find the SEAI figures to be pretty off. I'm using a fraction of what they say I should be using. With regards heating they don't even correlate it to degree days

The_Conductor

As a general rule of thumb- get a proper complete building survey done- the BER, while it is a legal requirement, is a complete and utterly useless exercise that doesn't impart useful information to any potential buyer or renter.

Ray Palmer

BER is very vague and inaccurate to calculate anything like they are showing. I would also doubt a new house will actually match a B1 rating.

You would want to calculate with a price increase on fuel considered.

I went to the bother of insulating my rental property. I don't think tenants really consider it as factor on rental price.

The main benefit is comfort of living rather than cost. I heat my house for about 2-3 hours a day and it stays warm. It used to take 6 hours to be similarly warm but he minute the heating was off the house cooled down, the insulation was well worth it. I guess that means heating is at least half the cost but I don't think I noticed the cost with fuel going up and the weather be so cold the last few years.

What people miss sometimes is the insulation also keeps the house cool. So you actually use your heating longer as your house isn't warmed by the weather outside.

hfallada

As far I know. If you sell a house in the UK, you must give 3 years of heating and electricity bills. They would give an accurate utility cost not some figure pulled from tiny air like BER ratings. You can improve your BER rating by having 2 CFLs, a smaller sitting room or heating control. But if your 2 CFLs are in a utility room and a bathroom you never use. They arent going to save any energy.

I have never seen a single tenant using a BER as an important factor buying a house. There is far more important things to consider than a rating which can vary from between a C1 to a C3 depending who carried out the survey (Sunday times got BERs carried out on the same house with different companies and the BERs varied greatly).