Energy-Saving Credentials High on UK Homebuyers Agenda
A survey conducted by the estate agent Savills revealed that homebuyers are paying more for properties powered by renewable sources and are looking closely at energy ratings.
According to Savills’ analysis people who are looking to move are more likely to consider energy-saving credentials when viewing a property than ever before. Finding a way to reduce their soaring energy bills has become an important priority. Nearly 6 out of 10 (59%) prospective buyers told the company that they were willing to pay more for a home if at least 75% of the property’s energy was powered by renewable sources.
The latest steep rise in energy bills has been very concerning for people across the UK. Energy bills have risen as a result of high global prices for gas and other fossil fuels. Unfortunately, the rise has increased electricity prices too, because a significant proportion of the UK’s electricity, around 51% of all electricity in the UK, comes from gas fired power stations.
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So, it is perhaps not surprising that Savills found that homes in England and Wales powered by renewable sources can demand a 59 per cent premium compared to regional averages.
Interestingly, 71% of people surveyed said that a home’s energy performance certificate (EPC) rating now played an important part in their considerations over whether to buy a property. Energy Performance Certificates (EPCs)F tell you how energy efficient a building is and give it a rating from A (very efficient) to G (inefficient). They will tell you how costly it will be to heat and light your property, and what its carbon dioxide emissions are likely to be.
Times are changing as almost a third (32%) of people said that they put more importance on EPC ratings than they did a year ago.
Despite the government’s emission reduction plans most UK homes are still dependent on fossil fuels for heating, hot water and cooking which accounts for more than a fifth of the UK’s carbon emissions.
With spiralling energy bills and further cost rises expected in the Autumn, gradually more households are seeing low carbon alternatives as one way to lower their costs.
The government has already banned gas boilers in new build homes form 2025 and are considering extending the policy to include all new gas boilers from the mid-2030s onwards. From this date all newly installed heating systems would have to be low-carbon or be converted to use fuel such as hydrogen.
An alternative to fossil fuel heating systems is the electric heat pump where warmth is extracted from the outside air, ground or water and boosted to a higher temperature using a compressor before being transferred indoors.
The government has now launched the Boiler Upgrade Scheme in England and Wales to help homeowners afford the upfront costs of installing low carbon heating systems such as heat pumps. Grants of £5,000 will be available for homeowners to have air source heat pumps (ASHPS), and in some cases biomass boilers installed, and of £6,000 for the installation of ground source heat pumps (GSHPs) or water source heat pumps (WSHPs). It has set a target of installing 600,000 heat pumps a year by 2028.
One interesting statistic is that there are more homes that run on cleaner forms of heating in London and South-west England than in the North-East where almost 9 out of 10 properties rely on mains gas.
The survey conducted by Savills showed that homes with heat pumps demanded an average of £483,935 and sold for a premium of 59% compared to average prices. This premium is even more pronounced in the South-East with homes on average 84% more expensive.
Lawrence Bowles, residential research analyst at Savills said:
“Faced with increasing energy prices, homes that offer more cost-efficient monthly alternatives – such as homes with heat pumps – are climbing higher up buyers’ wishlists when searching for a new home.
“However, our analysis shows that more environmentally friendly heating methods such as heat pumps and community heating systems are most prevalent in higher-value areas.
“As such, in many areas housing values would not necessarily support the investment in newer and cleaner forms of heating.
“It also highlights the enormous challenge set by the zero-carbon agenda targets and the uphill battle ahead that we face. While government subsidy will undoubtedly go some way in supporting people to reduce their homes’ environmental footprint, more resources and investment is needed to significantly reduce our reliance on fossil fuel heating.”
Lawrence Bowles believes that although government subsidies would help people to lower their homes’ carbon footprint, with for example improvements to home insulation or adding solar panels, more resources and investment are needed to help reduce the UK’s reliance on fossil fuel heating.