Investing in Sustainable Housing: Energy Efficient Homes Are More Desirable to Buyers

In the UK housing market, there has been a shift in preference towards energy-efficient homes, as buyers and sellers alike are becoming increasingly aware of the benefits of sustainable housing. Recent data has shown that energy-efficient homes are more likely to attract buyers on the open market, even in the face of a drop in average house prices. According to a survey conducted by the Royal Institution of Chartered Surveyors (RICS), 61 percent of estate agents and surveyors reported that homes with high energy efficiency ratings are not experiencing the same price falls as those without, indicating a growing demand for sustainable homes.

The appeal of energy-efficient homes is reflected in sales figures, with 40 percent of estate agents noting increased interest from buyers in properties that are more energy efficient. This trend is also driven by homeowners' desire to contribute to sustainability targets and combat rising energy costs. David Hannah, group chairman at Cornerstone Tax, commented, "It seems that homeowners all over the country are seriously considering turning to green renovations not only to combat the rising energy costs but also to add significant value to their home. By making their home energy efficient, homeowners will also save money in the long run and contribute to the UK's sustainability targets."

Cornerstone Tax conducted a landmark study on the role of energy efficiency in the housing market and found that making homes more energy efficient is becoming a key focus for homeowners, with 36 percent of people admitting that they have made it a goal for 2023. However, many homeowners face challenges in upgrading their homes due to the perceived high costs. The data from Cornerstone Tax revealed that 45 percent of homeowners find it too expensive to make energy efficiency changes without government support. Upgrading a D-rated home, for example, is estimated to cost nearly £6,500 according to the English Housing Survey.

The government has set a target for every residential property to have an Energy Performance Certificate (EPC) rating of C or above by 2035 as part of its long-term plan to tackle climate change. Achieving this target, however, presents challenges for homeowners due to the costs involved. David noted, "By making green renovations to your home, such as loft insulation, solid wall insulation, ground source heat pumps, and double glazing, homeowners will make an estimated £890 savings every year. However, the cost of installing these features can be a substantial obstacle for homeowners, with costs amounting to thousands of pounds."

The changing market dynamics are also impacting landlords, as many are now opting for newer properties to rent out. Jonathon Rolande, property expert at House Buy Fast, explained, "For years, the EPC was ignored by buyers, but that all changed with the energy crisis. Now, a home with a higher efficiency rating is much more desirable. Where there's desirability, there's demand, and higher demand pushes up the price. If the property is suitable for buy-to-let, potential landlords are looking even more closely at the rating." In fact, some properties may be deemed unsuitable for mortgages due to their low energy efficiency ratings, further highlighting the importance of sustainable housing in the current market.

While buying a new-build property may seem like the easiest option to upgrade to a more energy-efficient home, it's important to note that 30 percent of homes in England and Wales still have low energy efficiency ratings (E, F, or G), indicating that there is room for improvement in the existing housing stock. David added, "By making green renovations to your home, such as loft insulation, solid wall insulation, ground source heat pumps, and double glazing, homeowners will make an estimated £890 savings every year. However, the cost of installing these features can be a substantial obstacle for homeowners,