Kate Ryle looks at the major impacts that the new DPE reports will have on the way we buy, sell, advertise and inhabit French property
Since January 2011, every website advertising houses for sale or rent in France must provide in their publicity details of each property’s energy-efficiency rating from the official Diagnostic de Performance Energ�tique (DPE) report.
Indeed, all adverts, be they in magazines or newspapers, or even in estate agent’s windows, must display this according to specific criteria. Below is a description of what it actually means, why it was introduced and some thoughts on how it may impact upon property sales in France.
The origin of the DPE report was the third United Nations conference into climate control at Kyoto in 1997. Agreement was reached by the majority of countries to reduce greenhouse gas emissions by a quarter. In recognising that an average home in France consumes 250kWh/m� per year, the aim is to reduce this to 150kWh/m� per year by 2020 and even further to 50kWh/m� per year by 2050.
While there are government measures to get us to drive less polluting cars and lower taxes for more fuel-efficient new vehicles, the state has to look at other ways that, in the future, will encourage us to live in homes that consume less energy.
One way they have approached this, since 1 November 2006, is to have a diagnostic report done at the time of a sale. This measures the energy consumed by a building and the quantity of greenhouse gas emitted. By July 2007 such a test was also necessary for all rental homes. The latest obligations on homeowners, further to France’s second Grenelle environmental conference in July 2010, state that for both house sales and rentals the energy performance of any property with some form of heating must be mentioned in the publicity. In other words, before an estate agent can advertise a house on behalf of a seller or landlord, the DPE report has to have been completed.
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 energy source for all heating equipment is then estimated along with the associated costs.
Two diagrams or etiquettes are then produced; one shows the hourly expenditure of energy in kilowatts while in the other, the amount of greenhouse gases in kilograms of carbon dioxide per square metre emitted by the property is documented. The diagrams, similar to those shown on electrical goods such as fridges and freezers, show seven categories, from the letter A for the most efficient homes to G for the ones that need lots of energy to warm them up.
The last part of the report carries advice on how to reduce your 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 although the classic turning your thermostat down by one degree’ can save you a number of euros.
Who does the report and how much does it cost?
The report is done by a registered individual, usually working for a company that specialises in the production of 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 independent of estate agents. The cost can vary from between €100 and €250, usually based upon the size of a 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.
It has to be said that, so far, the DPE report, while offering prospective buyers and tenants additional information, has been taken with a pinch of salt by many in the property business. How one chooses to heat a home can depend upon personal preferences, age of occupants, health issues and lifestyles.
Owners of larger properties rarely heat the whole house, if for most of the winter there are just two people living in it. Yet the energy consumption is based on full occupancy. More than 61% of French houses were built before 1975, when the first building laws relating to making new homes in France more heat-efficient were introduced. These homes tend to consume around 328kWh/m2 per year, equivalent to the letter E and F on today’s DPE report.
Another criticism is directed at the part of the report that states how much energy can be saved by installing insulation and double glazing, not really taking into consideration the initial outlay of such investment and the often lengthy payback’ period.
How will the DPE report then influence the property market? Time will tell if prospective buyers and tenants, now armed with this additional information at the point of viewing (as opposed to after an offer has been accepted) will be more likely to choose properties with a more positive DPE report than others. Rising energy prices are equally having a significant impact upon the style and size of houses that people are seeking.
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 strengthen 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 of a house with an A to D rating
Another impact upon the pricing process will also be seen next year with the new calculation formula for buyers seeking a 0% interest on house loans. The French government, in assisting people in the housing market, has a pret � taux 0% plus (known as the PTZ+). The amount of any mortgage that a French resident can claim at a rate of 0% has been based on factors such as income, geography, age of house and price.
Now, however, the DPE will be a factor in this calculation. A house with an E to G rating will only be eligible for half the amount of interest-free loan in comparison with a house with a higher rating. Sellers of such properties may be forced to either modernise or lower their asking prices to attract buyers.
At the end of the day, the goal of the DPE, seen in its origins back at Kyoto, is to reduce the amount of energy we all consume in a world of finite resources and thus reduce our negative impact upon the environment. Housebuyers and sellers may prefer to view it more in terms of how it will affect the money in their pocket. However, the house sellers of today are tomorrow’s buyers, so it’s 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’re all winners.