11. Small Site Sustainability

11.1. Benefits

Sustainable development is financially sound development: meeting planning criteria, delivering a better-quality project with direct benefits to occupants and maintaining value better over the long term.

Direct benefits to occupants
Sustainable buildings deliver good ventilation and better air quality, reducing energy use and reduced water costs. They are less draughty, reducing mould and indoor toxins, reducing flooding issues on site and maximising healthy outdoor areas.

Planning and regulation benefits
Lewisham Council declared a climate emergency in 2019 and will expect to see projects that are part of the solution. Sustainably-designed development will be viewed favourably assuming that other aspects of the project are compliant. On small sites sustainability helps to reduce the strain on supplied services, and helps with Lewisham’s commitment to reduce carbon – as well as maintaining or improving biodiversity in the borough.

Building standards are constantly evolving with higher thresholds for energy use expected in the near future. Even smaller sites can take time to develop, so building to high sustainable standards is critical to avoid wasteful re-design and refit later on if regulations evolve.

Investment benefits
Buildings that consume less energy and are resilient to climate change are a better investment in the long run: cheaper to run, meeting evolving building standards and lower risk for banks and insurers.

For owners who occupy their buildings, the investment benefits are large and include lower energy and water bills, reduced or no requirements for later refit, improved maintenance, better access to mortgages in the future, higher valuation and resilience against climate change.

For developers who lease their properties, sustainable buildings will retain or even increase in value compared to other assets, attracting a wider pool of tenants. They are valued well by banks and insurers over the long term, reduce maintenance costs and are less likely to require expensive and time-consuming upgrades later.

For developers selling their investment project, energy-efficient properties will be easier to sell and achieve higher valuations. In a competitive market sustainability can be a key differentiator.

11.2. Better sales and rental opportunities

Sustainable properties achieve premium rents, have better tenancy retention and have access to the widest pool of potential tenants.

We are entering a decade of transition to a low-carbon economy. Sustainability is one of the leading drivers of innovation in the construction industry today. An increasing proportion of rental tenants are seeking sustainable properties and companies increasingly put sustainability amongst their core objectives.

11.3. Avoiding risk

Building to the lowest possible standards risks the property being unlettable, uninsurable and with the potential for costly refits in the future.

It is good and common sense to invest in ways that future-proof new homes to maintain their value. Upcoming changes in legislation (expected around 2025) will see owners of less energy-efficient properties be required to make improvements before they can let their properties, along with phasing out gas heating. There may be other restrictions introduced, and they may come sooner than expected if the government feels it is not meeting its objectives quickly enough.

Banks and insurers are talking about “stranded assets”, properties that are not sustainable and will require costly and time-consuming refurbishment in future.

Owners should also want to safeguard their properties against medium-term climate change impacts such as increased flooding and overheating rather than taking a “wait later, pay more” approach.

11.4. Access to green finance

Green finance and grants may be available for developments achieving a high level of environmental sustainability.

Banks and insurers are now looking to back built assets that are resilient to both climate change and to rapidly-changing regulations and planning standards. Financing mechanisms are being developed that will capture green building value and sustainable projects, with measurable key performance indicators (KPIs) and will have access to the broadest range of finance, even at the smaller end of the market. Green mortgages are now being offered for properties with high energy efficiency (with an Energy Performance Certificate of A or B).

Though they are usually limited in scope and timing, it is always worthwhile to check to see if any grants are available to switch to greener heating or make other energy-efficiency upgrades.

Applications for small sites have differing requirements in terms of documenting the performance of the proposed development. See section 21 for more information.

Healthier living environmentImprove planning case
Reduce sick daysImprove asset value
Improve comfortEnsure asset will meet increasing regulations
Reduce energy and water billsEnhance image
Improve image and staff retentionImprove market opportunities
Improve investment qualityRetain tenants and customers
Future-proof investment against climate changeFuture-proof asset against climate change
Future-proof investment against increased regulationHigher rental values