Buyers look to ‘greener homes’ to help cut energy bills

Key survey findings

• 76% of respondents rate a domestic electric vehicle charging point as more or equally important as it was a year ago.
• 35% rate rising energy costs as the biggest influence when buying an energy-efficient home
• Just 17% of homeowners plan to install a heat pump

Mitigating the impact of soaring energy bills is the main reason buyers would purchase an energy-efficient home, trumping both environmental and regulatory concerns, according to our latest sentiment survey.

Although the government’s ‘Energy Price Guarantee’ has placed a cap on the scale of recent energy price rises, average winter bills are still estimated to have almost doubled since last winter.

Alongside the rising cost of borrowing, it means the energy performance of a home is now central to buyers’ decision-making.

Asked which factor was most likely to influence their decision to buy a more energy efficient home, 35% said rising energy costs (see chart).

“While environmental concerns are a consideration for many home buyers, it is the record-breaking cost of energy that is dominating most buyers’ thinking at present,” said Chris Druce, senior research analyst at Knight Frank.

“Although wholesale energy prices are expected to fall back later this year, it is unlikely that buyers’ mindsets will change quickly,” Chris added.

The prospect of future environmental regulations affecting the value of inefficient homes was the second most popular response polling 20%, while 18% of respondents stated a preference to own a greener home and said, if necessary, they would pay more for it.

The survey also found that more than three-quarters of people (76%) thought having access to an electric vehicle charging point was either more or equally important as a year ago. Electric cars outsold diesel-powered alternatives for the first time in 2022.

Boosting the value of a home

The energy efficiency of England’s housing stock has improved over time. However, despite the government’s stated ambition to upgrade all homes to an Energy Performance Certificate (EPC) rating of C by 2035, more than half of existing houses carry a rating of D or below.

While cost remains a barrier for some to make changes, improving your home’s EPC rating could increase its value by as much as 20%, analysis by Knight Frank found.

Asked what improvements homeowners plan to make to improve the energy efficiency of their homes in our latest survey, half cited energy-efficient lightbulbs.

More substantive measures included fitting double or triple glazing; draught-proofing; and loft or roof installation, which all polled 38%.

Despite the government putting heat pumps at the centre of plans to decarbonise UK households –gas boilers will no longer be fitted in new-build properties from 2025 - just 17% of survey respondents said they intended to install one.

Underlining the scale of the challenge, the ONS calculated that as of March 2022 80% of households with an EPC are using gas to power their central heating system.

Our sentiment survey also found that cash and equity-rich buyers are looking to capitalise on their strong position in the UK housing market this year amid wider concerns over higher mortgage rates.

Image by Gerd Altmann from Pixabay