According to Yolande Barnes, director of Savills research, a radical change in the approach to development funding is required following the Government’s announcement of its shortlist for creating 10 eco-towns.

Barnes said: “Research shows that a large amount of the value tied up with developing to sustainable principles is realised over the medium to long-term. This does not suit the shorter term approach of many developers and their shareholders particularly at a time when funding is in crisis. The creation of new, longer term investment vehicles and mechanisms is required combined with a ‘cultural shift’ by developers towards timescales to enable investor/landowner participation over the entire development period and possibly beyond.

“Our research shows that householders do consider energy efficiency issues to be important but few are prepared to pay more for homes with measures to reduce environmental impact. They are more motivated by saving money than saving the planet. This currently presents developers with a real problem in how to bridge the cost/value gap associated with sustainable homes.”