We as a society have reached a moment when we recognise the reality of the climate crisis. According to research by the Energy Savings Trust, residential properties in the UK account for 21% of energy-related carbon emissions. Meanwhile, the National Housing Federation (NHF) found that England’s 25 million homes emit more CO2 annually than emissions by cars. Therefore, making homes and other buildings more energy efficient has become essential. If you find yourself asking, “how much is my house worth?”, the answer is “ if your house is energy efficient, then it is likely worth a lot.”
Green living is a step in the direction of mitigating climate change. It is particularly evident among homebuyers, who are willing to pay extra for buildings that use less energy and have better insulation, solar panels, heat pumps, and good EPC (Energy Performance Certificate) ratings. A report by Santander published in 2022 found that “there is also a preparedness to pay a higher price when buying an energy-efficient home.” The report also notes that according to estate agents, “buyers are spending an average 15.5 per cent more for an energy efficient property.”
Here are possible reasons for a higher demand among home buyers to invest in energy-efficient properties:
Awareness of sustainable living
The 2022 study by Santander found that “79 per cent (of the respondents) said that the increases in energy costs have made them think more about the importance of energy efficiency” while “77 per cent said making homes more energy efficient should be a national priority. “ (Santander, 2022). It is, therefore, indicative that homeowners and home buyers are becoming increasingly aware of the importance of making homes as energy efficient as possible.
The study also revealed that when it came to specific home improvement goals, increasing energy efficiency topped the list of desired future renovations. Although the expenses of improvements might prevent these from becoming realities, they remind us that many homeowners want to increase energy efficiency even if they need more resources.
Reduced Energy Costs
Improving energy efficiency can lower energy costs and raise the value of houses. Energy-efficient properties are said to have operating costs that are almost half those of a less efficient property, according to research from Zoopla published in June 2022. Yet another study by the Homes Builders Federation found that new-build owners save an average of £629 a year on energy bills.
The UK government’s Energy Performance Certificate data showed that, as a result, new construction used an average of 103 kWh/m2 of energy, compared to existing dwellings’ average of 294 kWh/m2. In contrast to older homeowners, who typically pay £1,072, new build homeowners will spend an average of £443.30 annually on energy. The report’s conclusion said that homeowners of new build homes could rely on their homes being warmer, healthier, better for the environment, and, most crucially, less expensive to operate than older properties because 96% of new builds are graded A-C for energy efficiency.
The need for new homes to be more energy efficient has increased due to new government regulations. The Future Residences and Buildings Standard guarantee that new homes constructed starting in 2025 will emit 75–80% fewer carbon emissions than those built according to the current laws.
Furthermore, the government plans to invest over £6 billion in decarbonising the nation’s homes and buildings. The government is also helping to cut costs for consumers who want to make improvements, encouraging more homeowners to invest in energy-efficient alternatives.
Higher Valuations in the future
Seventy-nine per cent of estate agents think a high EPC rating will help sell a home over the next 12 months. Furthermore, 70 per cent of estate agents said they were promoting a home’s energy efficiency above transport connections and off-street parking. Retrofitting your home to have more sustainable energy-saving options will add value to your property if you decide to sell it in the future (Santander, 2022).
Energy prices may continue to be unpredictably high for some time. Therefore, future home buyers prefer eco-friendly, energy-efficient structures that lower their carbon footprints. Energy-efficient solutions implemented in the home will be crucial in raising property value in the future, just like how opulent furnishings and equipment increased the worth of a property in the past.
A final note
The green home revolution is here! There is a high demand for energy-efficient homes in the market, with new buyers willing to pay more for green homes. This demand is likely due to the increased awareness of sustainable living, reduced energy costs, government regulations and scope for increased property valuation in the future. If you ever find yourself wondering, how do I find the value of my house in the UK? The answer is “more if it’s energy efficient!”.