Editor's note: This brief was summarised by The Property AI Newsroom from a report by Mortgage Solutions. Read the original article for full details.
EPC Ratings Have Modest Effect on House Prices
Nationwide's analysis of English Housing Survey data indicates that properties with an EPC rating of A or B attract a modest 1.6% price premium compared to similar homes rated D. Despite government efforts to encourage lower EPC ratings by 2030, the impact on owner-occupied house prices remains limited.
Currently, 53% of owner-occupied homes are rated A-C, a significant increase from 21% a decade ago. However, only 22% of homeowners cited increasing property value as their main reason for making green improvements, and just 7% undertook such work in preparation for a sale. The majority of homeowners appear to focus on personal benefits from energy efficiency upgrades.
Homeowner Attitudes and Actions
The research found that 78% of homeowners expect buyers to pay more for energy-efficient homes, with this view more prevalent among younger buyers. Among those aged 25-34, 32% expected buyers to pay significantly more, compared to 5% of those aged 55 and over. Additionally, 69% of respondents believe EPC ratings are more important now than when they purchased their home, and 77% said EPC ratings would be an important factor in future property purchases. Despite this, over half of those surveyed did not know their current EPC rating.
Popular energy efficiency measures include installing solar panels, improving insulation, and upgrading windows and doors. Of those making improvements, 55% had added solar panels within the last two years, with an average spend of around £11,000. Insulation improvements averaged £4,000. The main motivations for making green improvements were reducing energy bills (60%) and increasing home comfort (48%). Nearly three-quarters of respondents reported lower energy bills after making improvements. Properties rated A, B, or C could save around £400 per year on energy costs compared to D-rated homes.
Barriers to Green Improvements
For those who have not made energy efficiency upgrades, the most common reason was the inability to afford upfront costs. A quarter of respondents said such improvements were not a priority, 19% believed the savings would be minimal, and 21% were unsure which improvements would be most effective. Overall, 17% cited a lack of information or understanding. Nationwide noted that the current pace of improvements is slow and suggested further incentives may be needed to help decarbonise homes.
Source: Mortgage Solutions