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.
Homebuyers Prioritise Energy Bills Over Paying Premium for Efficient Homes
Most UK homebuyers consider energy efficiency important when choosing a property, but few are willing to pay significantly more for homes with better energy performance, according to research from Leaders Romans Group (LRG).
A survey by LRG of more than 700 buyers and sellers found that 85% of prospective purchasers said energy efficiency was important in their decision-making. However, only 2% of respondents said they would pay significantly more for a property with better energy performance, while 26% would pay a little more. More than a third said they would only pay a higher purchase price if the extra cost was offset by lower energy bills over time, and 37% said they would not pay any extra at all.
The research highlighted that the difference in annual energy bills between a typical three-bedroom semi-detached home with an Energy Performance Certificate (EPC) rating of C and one rated D is around £663, or about £55 per month. LRG noted that this monthly saving is comparable to the repayment cost of approximately £10,000 of additional mortgage borrowing over 25 years at current fixed rate levels. This suggests buyers are weighing running costs against purchase price when assessing affordability.
The findings come after Ofgem’s energy price cap increased by 13% on 1 July, adding around £18 per month to the typical household energy bill. The survey also found that buyers want more information about ongoing property costs during the home buying process, including details about heating systems, boiler age, and likely energy bills.
For letting agents and inventory clerks, these findings underline the growing importance of providing clear information on energy efficiency and running costs to prospective tenants and buyers. Energy performance and associated costs are becoming key factors in property selection and negotiations.
Source: Mortgage Solutions