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PROPTECH-X ‘Proptech & Property News’: Why net zero targets require behavioural change | House price differentials more important than sales price

Changing residents’ behaviour is key to meeting net zero targets, new research reveals

PRESS RELEASE: Latest research has revealed that encouraging residents to make more sustainable decisions in their accommodation can help to reduce a building’s carbon emissions by up to 35%. An independent study entitled Changing Behaviours, conducted in collaboration with  ASK4, Utopi, and Spike Global, investigates the behaviour of residents living across a range of residential housing to determine how their energy use can affect net zero targets. The research focuses on the barriers currently preventing residents making a switch to more sustainable behaviours, the importance of education, and the role that behavioural science and technology can play in reducing energy consumption.

The research reveals that 65% of millennials and 70% of Gen-Z, would be prepared to make major changes to their own lifestyles to combat climate change. The report also looks into the challenges the wider residential sector faces when it comes to energy efficiency and examines the best methods to reduce excess energy consumption. Strategies that encourage residents to conform to the wider group can be used to promote sustainable behaviour too. Delivering energy usage statistics and data directly to the end user in comparison to their neighbours’ energy consumption can result in a more considered approach to the amount of energy they use, ultimately leading to a reduction in carbon emissions.

As part of the research, Utopi compared two identical electrically heated student flats, one of which was heated between 18-22 degrees Celsius, with the other heated between 25-30 degrees. At the end of a six-month period, data revealed that the overheated flat used 1670% more electricity – equivalent to an additional £1474, or 1.65 metric tonnes of carbon dioxide.

Ben Roberts, Co-Founder & CMO of Utopi, comments: “Excess energy consumption is a longstanding source of frustration within the residential market, and in particular, within the PBSA sector, which is why it’s crucial to communicate residents’ own energy use in a way that is clear and easy to understand. For example, students will often open a window or turn on a fan before turning down the heating, leading to unnecessary waste. Our own research reveals a real need to balance student freedom of behaviour with the need to meet carbon emissions and energy costs targets, and it is clear that turning the heating down by just a few degrees can save hundreds of pounds and reduce our carbon footprint.”

Jonny Wootten, Marketing Director at Spike Global, comments: “Industry net zero targets are inextricably linked to residents’ own energy and water consumption. As we enter a cost of living and ecological crisis, there is a real impetus on how we begin the conversation to empower residents to take positive action and reduce their energy waste. Not everyone may fully understand all the jargon, such as what a kilowatt hour means. We use resident portals to engage and educate residents directly, in a way that’s easy to understand.” 

The report found that turning the heating up by three points in an average apartment can double the amount of electricity consumed. This poses a serious challenge for the PBSA sector, which relies on the ‘all-inclusive bills’ model to attract students. While 70% of students found all-inclusive bills to be a key desirability factor in their property search, damning data shows that students use up to 35% more electricity than accommodation where utilities are billed separately.

Jess Glover, Head of Marketing at ASK4 comments “Clearly there is an ‘out of sight, out of mind’ attitude. There is a stark need for education in the PBSA sector, and the solution begins with raising awareness of residents’ energy use via easy to access data.”

This data helps residents recognise and understand their patterns of energy and water usage, and crucially compare their results to others. As one resident cited in the research: “we can only know [how to reduce our consumption] if they make us aware of [it] and the operators don’t do that”. The research found that this approach is most successful when data is presented in an empowering manner that is easy, attractive, timely and social. One resident added: “You need to compare with something or someone. Without comparison of how you are doing, you don’t know how to interpret your usage.”

Furthermore, there is mounting evidence to suggest that investing in developing a community not only enhances the resident experience – it can also lead to better outcomes. Research revealed that residents will behave in a way that benefits the collective if they feel attached to where they live. If people feel like they are part of a wider community tackling climate change, they are more likely to join the movement. The use of resident portals offers an effective way to foster a sense of belonging within a building.

Jonny Wootten adds: “Resident portals can be customised to include handy tips such as location of recycling bins, alongside energy use messaging, making it easy for residents to make small sustainable changes to the way they live. Pair this with personalised messaging to motivate the end user, and timely prompts are provided when residents are most likely to be receptive, and residential providers could make great strides to meet their own ESG targets.”

House price differentials are more important than sales price

PRESS RELEASE: In today’s transitional market, house price differentials are more important than sales price. This is according to Iain McKenzie, CEO of The Guild of Property Professionals, who recently spoke to a few Guild Members about their local property markets and strategies they are using when speaking to clients.

Adam Mackay, from Mackay Property in Sawbridgeworth, says that the market in his local area has resorted back to a ‘normal’ market. “Last year we had exceptional high demand and an influx of buyers with certain properties attracting hundreds of viewers. Those days are gone, and we are seeing a more normal level of buyers. We are not seeing first-time buyers in the forces we have previously, and mid-level properties seem to attract less interest than the larger homes. This has caused us to shift our focus to the higher end of the market. We are still seeing people wanting to move, but it is price sensitive, so if a property was on the market for £450,000 a while ago, it would be on for around £410,000 or £420,000 today,” he adds.

Director of Parson in Diss, Kevin Parson, agrees, saying he is seeing a transition in his local market. “Three months ago, agents were valuing properties at a higher price than they are now. We are finding that we have to advise our clients about the shift in the market. I have always found that in this type of market a lot of sellers are chasing the market and are often a step behind, and we are trying to educate them to ensure are ahead of the market rather than trailing behind. We have been focused on informing our clients that the sales price of their property is less important than the differential between the home they are selling and the one they are buying,” he comments.

McKenzie says that where the market is so transitional is where you have agents that are quite blunt in their style and are still buying the instruction. “There are still agents in the market who are overvaluing properties just to get the instruction rather than giving the right advice to the customer. A good agent will be able to navigate how to deliver best advice to the customer, moving away from the word valuation and rather using terminology such as market appraisal, because it is the market the dictates the home’s value,” he notes.

Parson agrees, adding: “When talking to sellers and they think of the word ‘valuation’, whatever the valuation is, they will believe that to be gospel but that is not the case. Our job at the moment is to advise on the marketing of the property and positioning it in the market, so that it is positioned to sell because that is ultimately what the vendor wants to do. Sellers may have an idea that the values seen three months ago is what they would achieve now, so it is important to educate them on that and help them understand that the market has changed. In order to get a seller moved in the time frame they want to move, they will need to understand that their property should be correctly positioned within the market.”

McKenzie says that people often get hung up on prices, when in fact, as mentioned earlier, it is about differentials. “It is about the difference between the price you sell at and the price you buy at. What I used to tell my sellers back in the 80s and 90s, was that it doesn’t matter what your home is worth, as long as you buy your dream home with a £20,000 or £30,000 differential, because then I have done my job as an agent. As a consequence of that, every offer you get becomes a good offer, because it is a working offer, and if you accept £30,000 less for your property, but then buy a property for £30,000 less, it is same thing. In addition to that if you buy upmarket you actually make more money, by possibly getting a better deal or percentages are different,” he adds.

Mackay notes that in today’s market it is imperative have stats and data that help provide insight to sellers about what is happening in the market. He says: “We ensure that everyone within our business has access to market stats so that we all on the same page when talking to clients. Often, we will pull people back to the five- or ten-year data for them to have a look at how property prices have changed over the past decade, rather than focusing on the last two years when property price growth has not been on a normal trajectory.”

According to McKenzie, many sellers may feel as if prices are going backwards but that may not necessary be the case. Expanding on that he adds: “If a neighbour sells their property for £800,000, and the vendor lists their property at £850,000 on the advice of the agent, if they then dropped to £825,000 or £815,000, they would feel like their house is going down in value. However, the reality is it isn’t, because if the neighbour’s home sold for a similar value this year, there is a lot of leeway in between in terms of marketing price, which is not the real price. Because of this, the market will feel like it is dropping more than it actually is. And again, a good agent will be able to explain that to a customer,” he concludes.

Proptech and Property News in association with Estate Agent Networking.

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Andrew Stanton Founder & Editor of 'PROPTECH-X' where his insights, connections, analysis and commentary on proptech and real estate are based on writing 1.3M words annually. Plus meeting 1,000 Proptech founders, critiquing 400 decks and having had 130 clients as CEO of 'PROPTECH-PR', a consultancy for Proptech founders seeking growth and exit strategies. He also acts as an advisory for major global real estate companies on sales, acquisitions, market positioning & operations. With 100K followers & readers, he is the 'Proptech Realestate Influencer.'