What Value Of Property Can Be Determined By A Number Of Factors

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The value of property can be determined by a number of factors. These could be size, location, type, design, and age with energy efficiency being one of the weakest factors (DECC, 2013). Nevertheless the need for sustainable properties is growing and may begin to influence the value both in terms of purchasers’ behaviour and occupiers’ preferences (RICS, 2014). In the UK property valuation has to comply with the RICS Valuation – Professional Standards (the “Red Book”), 2014. The Red Book (2014) includes mandatory valuation rules and best practice guidance to undertake valuations. It notes that valuation professionals should be aware of sustainable features and the implications these have on property values in the present and future.…show more content…
This represents a significant premium of 40% being paid for sustainable properties, even taking into account 10-15% premium that is usually attributed for new developments. However, this evidence is based on one area and cannot be generalised to the whole of the country. Nevertheless they note that there is a shortage of homes in the UK, with high demand and insufficient supply, and therefore it must be evaluated who are the people that are willing and able to pay a higher premium for sustainable properties (Rodrigues et al, 2012). The UK government and national newspapers have published a number of news articles on the topic; however these may be subject to industry bias. In 2012 a study was conducted by the Department of Energy and Climate Change, which analyses the impact of different EPC ratings on property value (DECC, 2013). The study found that properties with EPC rating D are sold for 8% more than those with a G rating and homes with A or B ratings are sold for 14% more than the lowest rated properties. The analysis shown per region can be found in Appendix 5. Additionally the study ascertains that the majority of properties have a C, D and E EPC rating with flats being the most efficient as nearly half of them are rated a C or a B. The regional variations show that price variations are considerably smaller in
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