New research shows that homeowners who improve their property’s energy efficiency prior to putting it up for sale are able to bank an average of 16 percent more than those who don’t.
Rightmove’s study has shown the potential financial benefits of raising a property’s Energy Performance Certificate rating from a D, E, or F to a A. It found these could add up to more than £55,000.
The study analyzed more than 200,000 homes on the property site that had been sold twice with an improved EPC rating, in order to understand the impact on the final selling price of a home.
Cardiff is the leader in this category with the largest proportion of its homes being improved from a D or below rating
The average increase in price for a home by those who have upgraded their rating from an F or a C to an F is 16 percent.
Banking sellers can move from an E into a B, which is an average of 8 per cent more. Moving from a D or a C to a B is an average of 4 percent.
Based on the current national average asking price of £344,445, it could mean an additional £55,111 for someone moving from an F to a C rating.
At the same time, it could translate into an extra £27,556 for someone moving from an E to a C rating, or an extra £13,778 for someone moving from a D to a C rating.
It comes after the publication of the Government’s Heat and Buildings Strategy. This strategy was designed to reduce carbon emissions from homes and commercial buildings.
Rightmove data shows that buyers are willing and able to pay a premium in order to secure a green house.
Over one fifth of British homes have been upgraded from a D rating to a C rating in the last five years.
The South East was the top regional list with 26 percent, followed by Wales (24%), and East of England (23%).
Cardiff is the city with the highest percentage of homes that have been upgraded from a D rating or lower to a C rating or higher in the last five year. More than a third of the homes are at 35 percent.
Coventry with 34% came in second, followed by Barry in Wales with 33%.
| Lage | Region | Proportion of homes which have been improved to a level of a C or higher rating than a D or lower |
|---|---|---|
| Cardiff | Wales | 35% |
| Coventry | West Midlands | 34% |
| Barry | Wales | 33% |
| Woking | South East | 32% |
| Poole | South West | 31% |
| Wythenshawe | North West | 31% |
| Chester | North West | 31% |
| Swindon | South West | 31% |
| Guildford | South East | 31% |
| Thornaby on Tess | North East | 30% |
| Source: Rightmove |
Rightmove’s Tim Bannister said that Cop26 will make people more aware of their environmental impact and will seek out ways to be greener in their own homes.
“Although larger improvements to make homes more efficient in energy use can be expensive, the Government has laid out ways it intends to support green choices in its latest strategy.
“Our study suggests that upgrading your home’s Energy Performance Certificate’s rating can have a longer-term benefit when it comes time for you to sell.
“While this must be balanced with the cost of improving it, we expect that energy efficiency will become a top priority for buyers over the next few years. These initial numbers indicate that people are willing to pay a premium to have a home that is more future-proof.
Energy efficiency improvements: An Air Source Heat Pump looks like an outside air conditioner unit
| Original EPC rating | New EPC rating | Average sold price premium (%) | Sold price premium based on current national average asking price (£) |
|---|---|---|---|
| F | C | 16% | £55,111 |
| E | C | 8% | £27,556 |
| D | C | 4% | £13,778 |
| Source: Rightmove | |||
The Government’s Heat and Buildings Strategy isn’t good news for all property sellers.
Estate agents warned this week that people who live in older, rural or listed properties may be unable to sell if strict green financing targets are set.
Boris Johnson’s plans to make Britain greener by 2050 are responsible for this. Mortgage lenders would be required to set targets for the energy performance and properties in their portfolios.
A British body representing estate agents claimed that the measures could lead to a distortion of the property market. They also called for Britain’s historic stock of housing to be considered.
Timothy Douglas of Propertymark said that ‘incentivising green improvement to properties via loans creates risks of trapping owners with older properties, people who live in rural or listed buildings, or conservation areas, making them difficult to sell their homes and thus reducing their value.
Propertymark stated that people who live in older properties might be left with homes they cannot sell if they are unable or unwilling to finance them.
The effect would be felt more strongly by less wealthy owners as more buyers would be able to ignore mortgage restrictions. However, older homes with high-end features would remain desirable.
Douglas stated: “The use of targets could distort market and sway lenders toward preferential, more modern homes in order improve the rating of their portfolio.
“Stopping large amounts of housing stock from being allowed to enter the market could cause havoc both for home buying and selling, as well as the wider economy.
