Homes with high energy efficiency ratings are proving to be more appealing to potential buyers.
Currently, energy-efficient homes are outperforming other properties.
According to the Royal Institution of Chartered Surveyors, six out of ten estate agents say homes with high energy efficiency ratings are holding their value despite the slowdown in the overall market.
Furthermore, 40% reported that energy-efficient homes are becoming more popular with potential buyers.
As a result, 41% of sellers attach a price premium to homes with high energy efficiency ratings.
Mairead Carroll, senior specialist in land and property standards at RICS, said:
“It will be fascinating to see how important energy efficiency becomes to buyers over the next 12 months.”
As a result of higher mortgage rates, inflation, and cost-of-living pressures, buyers are becoming more value-conscious.
In 2023, what will buyers be looking for?
Buyers are factoring energy costs into moving decisions
From £1,277 per year to £2,500 per year, the average household’s gas and electricity bill has doubled since 2022.
Bills have been kept low by the government’s Energy Price Guarantee. The law limits the amount suppliers can charge per unit of gas or electricity.
Gas and electricity bills will rise by around £3,000 in April as the guarantee changes.
Since these costs have risen, home buyers have increasingly factored heating costs into their moving decisions.
Mortgage lenders are looking at potential energy costs too
Buyers aren’t just drawn to energy-efficient homes because they want to save money.
Mortgage lenders are also taking energy costs into consideration when assessing mortgage affordability.
Your lender may only lend you a smaller amount if they think your budget can’t handle further increases in energy costs.
People on low incomes and first-time buyers are most likely to be affected.
In contrast, if your home has a high energy efficiency rating, which makes it more cost-effective to operate and heat, lenders are less likely to worry about your impact on future gas and electricity prices.
An Energy Performance Certificate (EPC) ranks properties according to their energy efficiency.
The highest EPC rating is A and the lowest is G. An EPC is required when selling or renting a home.
EPC ratings of A or B are obtained for 80% of new-build homes, but only 3% of older properties receive these ratings.
What can I do to make my home more energy efficient?
Making your property more energy efficient can be achieved in a number of ways.
Up to 25% of heat can be prevented from escaping through the roof by insulating the loft, while 35% of heat can be prevented from escaping through cavity walls by installing cavity wall insulation.
Energy-efficient windows and a new boiler will also make your home more affordable to run.
A smaller scale effort can also be made by replacing your light bulbs with energy-efficient ones and sealing any gaps that let draughts in.
You can get financial assistance to make your home more energy-efficient
You can improve your home’s energy efficiency through a number of programs.
In accordance with the Energy Company Obligation, energy companies must assist you if you are claiming certain benefits.
Insulation for your loft or cavity walls (as long as it’s suitable for your residence), double glazing, and even a new boiler if yours breaks are all covered by the scheme.
Financial support to make your home more energy efficient
There are a number of schemes to help you carry out energy efficiency home improvements.
If you’re claiming certain benefits, energy companies have an obligation to help you under the Energy Company Obligation scheme.
The scheme will pay for loft or cavity wall insulation (as long as it’s suitable for your home), double glazing, and even a new boiler if your current one has broken.
Energy Company Obligation scheme – Ofgem
If you own a home in England or Wales, the Boiler Upgrade Scheme can give you £5,000 towards the cost of an air source heat pump or biomass boiler.
Or you can get £6,000 towards the cost of a ground source heat pump.
Boiler Upgrade Scheme – GOV.UK
Another option is the Green Homes Grant Local Authority Delivery Scheme.
Grants averaging £10,000 are available to homeowners to install solar PVs, air source heat pumps, and loft, underfloor, external wall and cavity wall insulation.
To qualify, you must have a household income of less than £30,000 a year and your home must have an EPC rating of D, E, F or G.
You can apply through your local council.
The government also recently launched the Green Home Finance Accelerator scheme.
Under this scheme, £20 million is being made available to lenders to fund affordable loans for homeowners carrying out energy efficient improvements.