“I appreciated not only their stunning architecture and layout but the significant ‘eco green’ design,” said Jeff, a 40-something native of New York, who requested anonymity and who has signed for one of the mansions in the complex.
The corporate finance executive with interests across the US and Europe wanted a place for his family as he looks to expand from a base in London. The “environmental benefits really set the scheme above and beyond other London new-build properties we were viewing in the local area,” he said.
This desire to be more green comes as the carbon footprint of the wealthy comes increasingly into focus. The world’s richest 1 per cent are by far the fastest-growing source of emissions, driven by their diets, the way they live, travel and the cars and homes they own, the World Inequality Lab says.
Also, governments are increasingly demanding more energy-efficient living. In the UK, tackling the energy inefficiency of real estate is seen as crucial in weaning the country off fossil fuels. Almost half of the UK’s energy consumption is for heating, and refurbishing its housing stock is seen as key to reducing energy demand and meeting its climate goals.
The UK government wants all homes upgraded to an energy performance rating of C or higher on a scale of A to G by 2035. Landlords have even less time to upgrade their properties, with the latest government proposal requiring homes starting tenancies after April 2025 to have a minimum C rating – about 2.45 million properties currently fail to meet that criteria.
“It’s just like buying a car,” Domvs’s O’Brien added. “You’d be hesitant to buy one now that isn’t electric because you know that by 2030 it will only be electric cars allowed.”
Many British homes are made of brick and date to the Victorian era. They lose heat three times as fast as those in European countries. Well-insulated dwellings use less gas and take better advantage of electricity-powered systems such as heat pumps.
Homeowners can improve their energy score by modernising boilers or adding insulation, double-glazed windows and solar panels. But with upgrade costs averaging about £8000, according to the English Housing Survey, landlords currently face renovation bills north of £19 billion.
For those renovating large, luxury homes, the fees are likely to be even steeper.
“There is some financial motivation to get these improvements underway, as there are quite stiff penalties,” said Jackie Bowie, head of Europe at risk consultant Chatham Financial. “There will be further tightening of requirements to come.”
Camilla Dell, managing partner at buying agent Black Brick Property Solutions, recently negotiated a deal on a block of seven investment apartments in South Kensington with energy efficiency ratings of D or lower.
Black Brick was quoted £200,000 to upgrade the properties to a C rating, which the agent subsequently negotiated off the purchase price.
“So much of London’s property does not meet the C rating,” Dell said. “Most listed buildings and Victorian buildings don’t, but they are some of the capital’s most sought-after prime real estate.”
Defying the slowdown
On Avenue Road, potential buyers are looking at the eco-mansions expected to be completed in June 2025. More than 120 expressions of interest were submitted in January, says Domvs’s O’Brien, including a number of rich Middle East and US buyers looking to cash-in on the strength of the US dollar against the pound.
Wealthy, less debt-reliant buyers have helped London’s most expensive homes defy a slowdown in Britain’s housing market, which is facing disruption as it adapts to higher borrowing costs.
New sales instructions for homes priced at £5 million or more were 74 per cent higher in October-December compared with the pre-COVID-19 average, data by researcher LonRes shows.
The level of interest for the Avenue Road mansions, set to be rated A and to be priced for at least £20 million, is “demand that I’ve never seen before,” said O’Brien. The interest reflects the evolving priorities of buyers as fresh climate regulation looms.
“Buyers often raise eyebrows at the premiums being paid for new build property,” said Dell of Black Brick.
“I can see this premium going even higher in the future as it’s the new-builds that have the highest energy-efficiency ratings,” she added.