Influencing Behaviours - ISM
House purchasing behaviour – energy efficiency
Output from Workshop at SG on 14/1/2014
Understanding this Report
•
Scotland’s Sustainable Housing Strategy (SHS) was published in June 2013. It sets out a route-map for meeting our
fuel poverty and climate change targets. The SHS identifies the need for a Financial Market Transformation so that
“there is market premium on … low carbon homes … because these are valued by lenders, consumers and
surveyors”.
•
A collaborative ISM Workshop was held on 14 January 2014 to explore the role energy efficiency plays in home
buyer decisions.
•
Participants were asked to describe current decision making around house buying and energy efficiency and what
current policies and practices (government, organisational, official, unofficial, etc.) might influence it. Participants
were then asked to suggest changes that could raise the profile of energy efficiency in decision making.
•
This report captures that discussion. It is structured around the Individual, Social and Material contexts.
•
The observations and suggestions are those of the participants and do not constitute the views of the Scottish
Government.
•
This report will be considered by the Scottish Government as it develops an Action Plan to help realise the
Financial Market Transformation that has been identified.
Individual context
• What do people look for? EE is a second tier issue. First tier – Location (school
catchment) No. of rooms, suit family, etc
• Do people believe or associate EPC ratings with lower running costs? Association
between EPC and comfort/warmer house?
• EE akin to council tax– not that relevant when buying a house (but people understand
council tax – do they understand EPC?)
• EST research shows people are in theory prepared to pay more for an EE house, but
in practice don’t see this; sellers don’t see or promote this as a sales / valuation tool
• People invest in home improvements (kitchen, b’room upgrades) because associate
with rising market values in 2000s. Does not apply to EE
• ‘Value’ is not just financial value
• EST research – people want
warmth and cost savings.
• No pleasure or excitement
from EE measures compared
to new kitchen (for many).
(But some excited by ‘eco’
houses?)
• People don’t like negotiating
so unlikely to negotiate on
price around age of boiler or
EPC rating (a poorly
understood topic) unless
prompted.
• Logical / practical ‘brain’ vs,
emotional ‘brain’ when house
buying – how to tap into the
former
• Perceptions of costs and benefits –
people don’t recognise running cost
savings or ‘see them’ when they
invest in EE themselves, so why pay
more for ee house?
• New builds – people expect EE and
lower running/maintenance costs,
but implicit not explicit
• PV panels higher savings than EE
retrofit?
• Buyers / sellers have no confidence
to negotiate on ee – poorly
promoted / understood
• Estate agents and solicitors don’t
have confidence / knowledge to use it
as sales tool???
• Lack of trust / belief in EPC?
• Know what – people don’t know or understand the cost
savings associated with different measures, never mind
links between EPC ratings and energy costs. (Issue of
predicted vs actual savings varying by type of household
and people within any given house).
• EST research – people say they want info like EPC
rating, but don’t see or pay attention to. Need to
consider how best to present this?
• House purchasing –
every 7 or so years but EE not relevant or
an established
practices / cultures (see
SOCIAL) –Negotiation
on price based on
structural issues;
furniture etc. not EE
Social context
• No norms around EE and
house buying
• No negotiation around EE
rating, e.g. EPC G rating, and
price offered and agreed on
(see habits)
• Surveyors – process of valuing
a house, driven by previous
market sales and ‘red book’, 3
comparable sales.
• Surveyors – information
paper on valuing EE
published 18 months ago but
not impacting - why?
• setting price, solicitors –
advise on negotiation on
price, but are they aware of
cost savings of different EE
measures? Single measure £200-£300 savings pa. not big
enough to advice negotiation?
£1k yes. (But old boilers –
advising negotiation on
those?)
• For key institutions, EE is not
(believed to be) a tool that
can be used to set price,
negotiate
• Focus EE (as a sales tool / priority
factor?) on those who have most to save
in energy bills, e.g. retired/stay at home
parents.
• Type of house and location signals status.
• Refurb – kitchen or b’room – can illustrate
good taste.
• EE invisible, not seen as good or bad taste
• Location = a type of property
• EE means:
• Green
• Confusing / useless
info
• Comfort?
• Cost savings [but are
these believed?]
• EE doesn’t mean:
• ‘Homes and Gardens’
• a desirable / good
home
• a negotiation tool
• value for money
• On ESPC website it means
presence of measures, not
EPC, more helpful?
• Can meanings change to
engage key institutions?
• Are there any around EE?
• Lessons from car industry and miles
per gallon – need comparable
currency / experience to lead.
• Limited social discussions around having an EE
home (relative to kitchens etc). Therefore, no
sharing of experience, no creation of norms.
• Options to share around solicitors estate agent
professional networks (e.g. linked-in)
Material context
• Known technologies
such as boilers vs
novel technologies
such as micro
renewables. But
people not sure about
cost savings of either?
• Contrast double
glazing – desirable
and normal – with
other EE measures.
Because double
glazing is a visible
social norm?
• EPC – cost savings not
clear enough/too
vague. Only presented
over 3 years –
short/long enough?
Doesn’t look
favourable. Also no
mention of grants
available.
• Informal rules – don’t
negotiate on boilers
or EE measures, but
do on curtains.
• The EPC - Meant to
make EE more
important;
• Does it just make it
more confusing,
meaningless and
ignored?
• Is the home report
the best place and
time for the EPC/EE?
Regulations already
require EPC rating to
be displayed in
adverts e.g. should it
sit alongside house
price on search
websites in a more
prominent way (ESPC
already includes)? For
sale boards?
• Multiple key
moments – selection,
assessment,
negotiation?
Soft infrastructure –
established house
buying process
Priority ISM factors to influence for
behaviour change
• Skills – know what (Individual)
– EE not understood sufficiently by all stakeholders
• Meanings, Institutions, Opinion Leaders (Social)
– Need to turn meaning of EE into something that can be
used by surveyors, estate agents and solicitors (to their /
their clients advantage)
• EE not valued as a sales / bargaining tool
• EE needs to be something that helps negotiation; pricing;
descriptions; speed of selling
• Objects, Rules and regulations, Time & Schedules
(Material)
– EPC not encouraging action on energy efficiency
– Multiple key moments in house buying process
Existing Policy and Guidance Mapping
(government and non-government)
• House sale websites- on
ESPC/GSPC but not
upfront
Insights
Material
• Measures –guidance, but
limited and impact?
• Social context lacking
•
Esp meanings
•
Institutions –
key role – very
patchy
• Individual – lack info and
knowledge (skills) to
assess – and value - costs
and benefits
• Home Reports contain
EPC rating and
recommended
measures
• Surveyors red book
and information paper
on EE (but latter not
had an impact. Why?)
• New Consumer
Regulations on house
sales
• Proposal – minimum
energy efficiency
standards
•
•
FCA – New affordability assessment for
mortgages (Apr 2014) but energy costs
low down list.
Solicitors and Estate Agents – no guidance
and no marketing/advice on EE to buyers
(occasional on new builds)
.
Policy and Guidance Mapping PLUS IDEAS
• Home Reports –move
up EPC rating to a
more prominent part
e.g. include in initial
summary along with
other key bits of
information, link with
running
costs/savings;
• Surveyors red book
and guidance on EE
(but latter not had an
impact. Why?)
• New Consumer
Regulations on house
sales
• Proposal – minimum
energy efficiency
standards
• Subsidise lower
mortgage rate for EE
houses for buyers
• Lower LBTT (stamp
duty) on EE houses
• Lower council tax for
EE houses
• House sale websitesGSPC, ESPC –move EE
upfront and make
searchable by
EPC/running
costs/measures
•
•
FCA – New affordability assessment for mortgages (Apr 2014) but energy costs low down list.
Solicitors and Estate Agents – no guidance and no marketing/advice on EE to buyers
(occasional on new builds). Surveyors guidance not impacting.
EE social marketing for institutions – EE articles into trade press, seminars at trade
conferences – running cost savings and evidence on what consumers want (EST research)
•
.
Ideas to consider and take forward
• Home reports and EPC – priming people and making EPC and
its rating more salient to all stakeholders (test). Reframe EE.
• Institutions – multiple key moments and roles - persuade and
inform
– Communication and social marketing (trade press, seminars,
conferences)
– Disseminating existing evidence and gathering new evidence (property
websites – encourage trials, live or otherwise)
– Find/create opinion leaders. 2020 group?
• Big consumer attention grabbers – stamp duty cut, EE
minimum standards? Social marketing.
• Package of well designed and researched measures to
reframe and prime EE homes as more valuable for
buyers/sellers/institutions.