Environmentally friendly homes are no longer the preserve of tree-hugging hippies, with those keen on capital growth equally as fond of a spot of triple-glazing. This shift in attitude is in part prompted by figures from the Department of Energy and Climate Change, which show that making energy-saving improvements can increase the value of your home by an average of 14 per cent — and up to 38 per cent in some areas.What is more, most homebuyers say they would pay a premium to own an environmentally friendly property, with one in four saying they would pay at least 6 per cent more, according to a report published last week by CBRE, the property services and investment company.

This is backed by a recent home renovations report by Houzz, the renovation and design website, which found that 38 per cent of people doing up their homes this year say that improving energy efficiency is a priority, with 13 per cent keen to integrate green materials into their homes.

The gold standard for environmentally friendly building is Passivhaus, which, as the name suggests, orginated in Germany. This is the highest level of sustainable building and insulation that money can buy. Yet despite the statistics there are still relatively few large housebuilders who offer Passivhauses.

An exception is Lendlease Property, which is selling the first Passivhaus new-build homes in central London at its Elephant Park development at Elephant and Castle in Southwark, south London. Jonathan Emery, the managing director of Lendlease Property in Europe, says that the homes — designed to mirror the style of the Victorian houses opposite — are experimental, with the company monitoring buyer reaction before offering them, or some of their eco-friendly features, in other developments.

The 15 houses, priced from £1.495 million, have sustainable features, including triple-glazed windows, heat recovery systems, air filtration, low-energy appliances and high-quality insulation. The builder has also used cross-laminated timber as a green alternative to concrete and steel frames.

The development, on the site of the former Heygate housing estate, will incorporate 3,000 homes (a quarter of which will be affordable) around a two-acre park — “the largest new public park in London for more than 70 years”, according to Emery.

All the properties on the scheme will source their energy from one central heat and power hub, giving all the homes in Elephant Park an energy rating 30 per cent higher than standard. It is also the only UK project to participate in the C40 Cities’ Climate Positive Development Program, which aims to create “climate positive” urban neighbourhoods through the reduction of greenhouse emissions.

All of which is ironic given that Elephant and Castle is probably best known for the traffic congestion around the two large junctions that dominate the area. Yet the landscape of Elephant and Castle is changing, with £3 billion being invested in its regeneration.

Across the neighbourhood there are 18 projects under way or in the pipeline. About 5,000 new and replacement homes — including 1,650 affordable homes — are planned. Delancey, the developer, hopes to replace the dilapidated shopping centre (built in 1965) with a pedestrianised town centre, 1,000 new homes in three tower blocks and a new campus for the London College of Communication, although these plans are proving controversial.

The hope is that the new town centre will link to the Walworth Road to create one shopping and eating destination. More than 50 shops are planned to run through Elephant Park and along the Walworth Road. It is also hoped that permanent homes will be found for the shops and businesses in the popular Artworks Elephant pop-up, which sits on the corner of the Walworth Road.

On the other side of the roundabout, Mercato Metropolitano is hoping its popularity will lead to permanency when the land owner, Peabody, redevelops the site. The official sponsor of the Metropolitano Cookery School is Two Fifty One, a neighbouring development by Oakmayne. Once complete, Two Fifty One will be one of the tallest residential towers in London, with 335 apartments priced from £675,000.

Parts of the Elephant have become gentrified thanks to its proximity to Westminster, the West End and the City, and a cycle superhighway that will link it with King’s Cross. It is also attracting first-time buyers priced out of SE1 postcodes closer to the river, according to Daniel Montaque, a sales manager at Kinleigh Folkard & Hayward’s London Bridge office. They have competition. According to Daniel Woods, a sales manager at Knight Frank’s Tower Bridge office, overseas buyers are also flocking here, attracted by the weak pound.