- Estate agents report home buyers are spending an average of 15.5% more for an energy efficient property.
- Four in five estate agents (79%) predict a significant increase in buyers seeking properties with an Energy Performance Certificate (EPC) rating C or above.
- Nearly three quarters (70%) of estate agents have seen homeowners struggle to sell their property due to poor energy efficiency, with 79% predicting this to rise in the next twelve months.
- Due to shifting demand, three quarters (74%) of estate agents have changed the recommended price of a property based on the EPC rating and report it taking three months longer to sell a property with a low EPC rating.
Santander’s Buying into the Green Homes Revolution (12.43 MB) report has found estate agents are poised to play an important part in increasing awareness and understanding among buyers of home energy efficiency, as demand for green homes increases.
Rising demand for green homes
The research(1), which asked 2,000 homeowners and 175 estate agents, their views on retrofitting, found that there is a distinct growing interest among home buyers for energy efficient properties, with 85% of estate agents reporting increased demand in the past twelve months.
Estate agents put it down to the rising costs of energy bills (54%), alongside increased number of green mortgage products from lenders (45%) and a greater awareness of the need to live more sustainably to combat climate change (51%).
Not only is there growing awareness but estate agents report this is creating a ‘green premium’ in the market, with buyers spending on average 15.5% more for a property with a high EPC rating.
Estate agents will play an important role going forward
While homeowner engagement is growing, there remains a knowledge gap, with three in five (60%) not knowing the EPC rating of the property they currently live in.
The research shows that estate agents are being proactive in helping bridge this gap, with two thirds (66%) in the past twelve months undertaking training to improve their knowledge, and a further 29% planning to do so in the future. In addition, three in five (61%) have updated their marketing materials in the past twelve months to make energy efficiency information more prominent.
Sellers with poor energy efficient homes predicted to struggle
Not only are estate agents seeing a rising demand for energy efficient homes, but they are also noting a decrease in demand for homes with poor EPC ratings. In the past twelve months, nearly three quarters (70%) of estate agents report seeing homeowners struggle to sell a property due to poor energy efficiency. Additionally, the time it takes to sell is on average three months more compared to a property with a good EPC rating. This trend is likely to become more common as four in five estate agents (79%) predict in the future there will be a rise in sellers struggling to sell due to poor energy efficiency.
Graham Sellar, Head of Business Development – Mortgages at Santander commented: “The feedback from estate agents is striking and reveals that in an environment of rising cost of living pressures, there has been a real shift in preference among buyers for homes with reduced energy costs.
“Estate agents will be a key part of raising understanding and awareness among buyers and sellers on the benefits of having an energy efficient home, so it is encouraging so many are being proactive in improving their understanding. With the findings showing a clear ‘green home premium’, the benefits are clear, and any changes made will not only reduce buyers’ bills but make the property more attractive to buyers in the future.”
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Notes to Editors
Tips for improving energy efficiency:
Check your EPC rating – Homeowners in England, Wales and N Ireland can check here and homeowners in Scotland can search here. EPC ratings last ten years and are required when listing a property for sale.
Get your property assessed – An accredited energy assessor can give recommendations and outline costs for improvements. A local assessor can be found on the EPC register.
Every little helps – Relatively cheap measures can reduce energy bills, for example switching to energy saving lightbulbs, turning electrical items off at the plug or reducing your thermostat by one degree.
Explore funding for the big changes – Bigger changes, such as replacing windows, may require additional funding. Some lenders will provide this at a cheaper rate - get advice from a financial adviser or mortgage broker.
Think about what you can do yourself – While fitting a boiler or windows might require an expert, replacing loft insulation might be something you could do yourself for a fraction of the cost.
Look at schemes in your area – There are replacement boiler schemes in England, Wales and Northern Ireland, and funding through Nest Wales and Warmer Homes Scotland. Many local councils also provide assistance to help retrofitting.
Get more information – Upgrading a home’s EPC rating is a journey and will take time. Each area of the UK has advice services to assist planning out short and long-term changes which can be found online.
My Home Manager – Available on the Santander mobile app, this assists Santander customers to manage their homes better, including the ability to check their home’s EPC and improve their energy rating. My Home Manager | Santander UK
EnergyFact – Is a free home energy report in partnership with Countrywide Surveying Services, providing information and guidance on how to make homes more energy efficient. Get your EnergyFact® report | Santander UK.
Green Additional Loan – A loan up to £25,000 is available to mortgage customers and offers a reduced rate of borrowing for green home improvements. Green living – green improvements | Santander UK.
Greener Homes Hub – Dedicated pages on the Santander website that provide information on greener, more sustainable living. Visit the page here: Greener living – your home | Santander UK.
1) Consumer research among 1,000 UK homeowners looking to purchase in the next five years and 1,000 UK adults looking to buy in the next five years, alongside a survey of 175 UK-based estate agents was carried out by Opinium Research between 25-30 May 2022.
2) National Housing Federation research (August 2021): National Housing Federation - England’s leaky homes are a greater threat to climate than all of its cars