Halifax says homebuyers pay ‘green premium’ of up to £40,000
Homes with the highest energy ratings are worth up to £40,000 more on average compared to less sustainable properties. Furthermore, environmentally conscious buyers are willing to pay a ‘green premium’ for a more energy efficient abode.
An in-depth analysis of property pricing data in England and Wales, compiled by Halifax, found that homes in all regions sold for a higher price as their energy performance – a measure which considers energy efficiency – improved. People selling their homes in England and Wales must have an Energy Performance Certificate (EPC), which ranges from ratings A-G and is valid for ten years – with A being the ‘greenest’ and G being the least.
The difference between the average property price of a home with an EPC rating of E compared to C is £11,000, which demonstrates the financial returns for more energy efficient properties. The greatest difference in property price between single EPC bands are those with G and F ratings, with the latter commanding almost £10,000 more on average.
A survey of prospective homebuyers also found a growing desire for greener homes, with two thirds (66%) of people saying they would feel proud to have an environmentally friendly property. The same proportion also said that their home represents their personal values and what matters to them. Additionally, more than two in five (42%) current owners said that the energy efficiency of their home was either very important or fairly important when choosing where to live.
Despite this, more than three quarters (77%) of homeowners do not know the rating of their own home, meaning they could be missing out on an opportunity to save on household bills and potentially improve its market value.
Additional incentives for going green are now available to first-time buyer, home mover, shared-equity, shared-ownership and new build mortgage customers. Halifax’s green mortgage cashback scheme offers £250 to those buying homes with an EPC rating of A or B.
Regional green hotspots
The analysis also revealed that there’s a disparity between different regions of England and Wales when it comes to the efficiency of an average home. Unsurprisingly, districts with more new-builds and flats tend to have higher than average efficiency ratings. Tower Hamlets in East London fares the best, with an average home scoring a high C, closely followed by Salford in Greater Manchester. Meanwhile, rural districts with older properties, such as the Isles of Scilly and the Welsh districts of Ceredigion and Gwynedd, are the least energy efficient at the moment.
Andrew Asaam, Mortgages Director at Halifax, commented: “The housing market has fluctuated significantly in the last 18 months. This, and the effect of lockdown, has made many of us reconsider what we value most in a home.
“Increasingly, buyers are recognising that environmentally friendly properties will reduce their monthly energy bills in addition to their personal carbon footprint. With our analysis also finding that greener homes sell for more money, it’s worth seeing what your home’s potential rating could be.
“Homeowners at the lower end of the energy efficiency scale are likely to see the greatest returns on their investments, even from making simple changes like switching to LED bulbs or adding loft insulation. There’s a huge opportunity for more people to get on board with this and reap the rewards.”
Do it yourself: Halifax’s tips for making your home greener
Improving the energy efficiency of your home doesn’t have to cost thousands; it can be as simple as swapping out regular lightbulbs for more efficient LED bulbs, or adding draughtproofing measures to external doors. Whether you are giving your current home a ‘green’ makeover to reduce bills, getting it ready for prospective buyers or on the lookout for a more environmentally friendly property, Halifax has developed the following top tips to consider:
Check the official government EPC website
Knowing your home’s EPC is vital to understanding which steps are the most appropriate to take in order to improve it. You can find the EPC of any property on the government’s EPC site, along with suggested improvements to help reach its potential: https://find-energy-certificate.digital.communities.gov.uk/
Carry out an energy efficiency health check
The first step to a more sustainable home is identifying the areas for improvement that will have the most impact. For a tailored action plan on the green upgrades that you should consider, visit: https://www.halifax.co.uk/mortgages/help-and-advice/green-living/home-energy-saving-tool.html
Switch to energy-saving lighting
One of the quickest and simplest changes you can make that will make a huge difference to your energy bills is to replace all your home’s current light bulbs with energy-saving light bulbs.
Use smart thermostats
A smart thermostat helps you save money by heating your home more intelligently. It’ll learn the best way to keep you warm at home while using the minimum possible energy. The more you use it, the more efficient it will become.
Upgrade your boiler
Swapping out your old boiler for a newer, more efficient condensing boiler is a sure-fire way to make your home greener. With a larger heat exchanger, they recover more heat than old models and will give a lasting reduction on your energy bills. If you do decide to upgrade, it’s worth doing some research to work out the best option for your home.
Invest in solar energy
You can start generating your own renewable electricity by making use of the free energy from the sun, with solar panels. As well as cutting down your household bills, solar panels are much greener solutions as the energy is renewable.