DIAGNOSTIC PERFORMANCE ÉNERGÉTIQUE - (DPE)
As from 1st January 2011, due to a change in legislation affecting the sale of property it becomes law to publish the energy classification when advertising a property for sale. This legislation covers any “habitation” that has any form of fixed heating system, which could cover anything from a full central heating system to a single electric radiator or even a wood burning stove.
What does this mean?
Every individual marketing a property via an estate agent must clearly advertise the results of the DPE report alongside the property details. In order to conform with these new regulations all vendors must now arrange to have a DPE report undertaken, the results of which are published with the details of the property. Let us make it simple, when you buy “white goods” they have an energy rating so you know what they are going to cost to run – the same now applies to houses. The charts below give examples, the more energy you use to heat your home the lower the rating!!
What is the DPE and how is it used?
The contents of the DPE report are strictly laid out. The first part describes the home and what equipment or heating system is used along with how hot water is produced, insulation and ventilation. The consumption of energy used by all heating equipment is then estimated with their associated costs.
Two diagrams below or “etiquettes” are produced; one shows the hourly kW of energy spent, the other the amount of greenhouse gases in kilograms of carbon dioxide per m² of the property.
Volumes of Carbon Dioxide produced by heating a property.
The last part of the report carries advice on how to reduce you heating costs and what work on the
property can be carried out to limit the consumption of energy.
In theory therefore, the consumer will have some idea of what his or her annual energy bills should be, as well as the work needed to reduce these costs, usually involving better insulation and the classic, “ turning your thermostat down by one degree” can save you X amount of Euros.
Who does the report and how much does it cost?
The report is done by a certified individual, usually working for a company that specialises in producing the other diagnostic controls, such as lead, asbestos, termites, state of the electrics etc., which are now annexed to the Compromis de Vente. These companies are totally independent of estate agents and their costs vary between 80 and 250 Euros, again the price is dependent on the size of the property. However, with the introduction of this new requirement, many companies are offering special deals, including having all the controls done at the same time for a reduced rate.
What it means for the buyer?
It give the prospective buyer an idea what it is going to cost them to heat the property. However, it does not take into account the imponderables, a person’s lifestyle, personal preferences, age of occupants, health issues etc. It takes an “average” family. Owners of larger houses tend not to heat the property, especially in winter if there are only two of them, yet the energy consumption for the report is based on full occupancy. Likewise many criticise the report when shows the savings to be made by installing double-glazing, insulation etc, as it does not take into account the initial outlay and the “payback” period. Take our property as an example: We have ground-source and solar heating so our consumption of fossil fuels is negligible, our home also has photo-voltaic panel to generate electricity – more than our needs, so have an A+ rating. That is all very well, looks good for any prospective buyer. The downside is the investment we made to get that status, taking that into consideration we only have a B-C rating.
How will this report affect the property market?
At present it is too early to tell, however the prospective buyer, tenant now has this information at the time of viewing rather than after their offer has been accepted. Our view being that most, if not all, prospective buyers/tenants will choose properties with a more positive DPE report than others as rising energy costs are having a significant impact on lifestyles. Thus estate agents are going to have problems selling a property with a low-efficiency rating (F or G) as prospective buyers will be looking at the energy and modernization costs – hence, the seller will either have accept a much lower valuation or spend money to update the property.
As part of any valuation of a home, estate agents have, for some time, tended to take into account how modern the heating system is and how much insulation is evident. The DPE will re-enforce discussions with sellers on how marketable their house will be if the rating is only an F or G. Conversely, agents will be happy to talk up the benefits a house with an A - D rating.
Another impact on process will be seen next year (2012) when we see the new calculation formula for buyers seeking a 0% interest on house loans. Our government, in assisting people in the housing market, has a “pret à taux 0% plus “(known as the “ PTZ + ”, we love our acronyms). This is the amount of any mortgage that a resident can claim at a rate of 0% has been based on factors such as income, geography, age of house and price. However, now the DPE will be a factor in this calculation. A house with an E-G rating will only be eligible for half the amount of interest free loan in comparison to a house with a higher rating. Thus properties in the E – G bands will become much harder to sell. Our thought is such properties will lose a considerable amount of their value, possibly being sold for redevelopment rather than immediate habitation.
Why is this happening?
Our world has finite resources of fossil fuels, fuels that produce a negative impact on our planet’s environment when we burn them. Others view it as how it will affect the money in their pocket. However, the house sellers of today are tomorrow’s buyers, so it is in everyone’s interest to improve the homes we live in. If the long term outcomes are the same with homes that are cheaper to run in a cleaner world then we are all winners.