Boosting Property Value Through Energy Efficiency
When it comes to purchasing property in the UK, buyers are increasingly considering energy efficiency as an important factor. Energy efficiency can greatly impact property value, making it a crucial consideration for both buyers and sellers.
If you're a homeowner aiming to increase your property's value, there are several strategies to consider. Cleaning, redecorating, and home extensions are popular choices but offer only marginal gains to the final valuation of a property, but enhancing your property's energy efficiency can provide a significant boost to your asking price.
In this article, resident EPC expert and Renewable System Designer Jacob, explains the relationship between energy efficiency and property value, and why it's a key aspect of the real estate market, plus, the most effective ways to upgrade an average D rating to a valuable A rating.
Understanding Energy Efficiency
Understanding energy efficiency for homes is crucial for homeowners looking to reduce energy bills, increase property value, and contribute to environmental sustainability. Energy efficiency refers to how well a home uses energy to perform its functions, such as heating, cooling, lighting, and powering appliances.
An energy-efficient property typically requires less energy to maintain comfortable living conditions, resulting in lower energy bills for residents.
In the UK, energy efficiency is measured through Energy Performance Certificates (EPCs), which rate properties from A (most efficient) to G (least efficient). An EPC provides information about a property's energy use and offers recommendations for improvements. You can learn more by reading our 8 Tips To Understanding Your Home Energy Efficiency.
The Impact of How Energy Efficiency Increases Property Prices
Upon analysing average property prices in England, a clear correlation emerges between a property's energy efficiency rating and its market value. As depicted in the graph, enhancing the Energy Performance Certificate (EPC) rating from G to a higher A rating can lead to a notable increase in house prices, with potential increments of up to 14 per cent.
Delving deeper into regional variations across England, a shift in median property price is observed when upgrading from EPC ratings of D to A/B. Notably, homes in the North East exhibit the most significant percentage surge in value, witnessing a substantial 12.2 per cent boost, equivalent to £16,219. Conversely, due to elevated average property prices, the South West experiences the largest monetary upsurge following an enhancement in energy efficiency ratings, with properties appreciating by £19,576, marking a 7.7 per cent improvement.
Such insights underscore the tangible financial benefits and increased property values associated with improving energy efficiency ratings in the real estate sector. Overall, we discovered the benefits included:
Higher Sale Prices: Properties with higher energy efficiency ratings (A or B) tend to sell for higher prices than those with lower ratings. Buyers are willing to pay more for homes that offer potential cost savings on energy bills.
Increased Marketability: Energy-efficient properties are more appealing to buyers. A high EPC rating can make a property stand out in listings, attracting more interest and speeding up the selling process.
Long-Term Savings: Energy-efficient properties offer long-term savings on utility bills, making them more attractive to buyers who are looking to reduce their overall living costs.
Government Incentives: The UK government offers various incentives for energy-efficient homes, such as reduced council tax and grants for energy-saving improvements. These incentives add to the overall appeal of energy-efficient properties.
Environmental Concerns: Many buyers are environmentally conscious and seek properties that align with their values. Energy-efficient homes contribute to lower carbon emissions, making them a popular choice for eco-friendly buyers.
How Homeowners Can Improve Energy Efficiency Rating
Sellers looking to increase their property's value can invest in energy-efficient upgrades. Some effective improvements include:
Upgrade Insulation: Improving insulation in walls, roofs, and floors can significantly reduce heat loss and enhance energy efficiency.
Double Glazing: Double-glazed windows help to maintain a consistent temperature inside your home, reducing heat loss and decreasing energy consumption.
Efficient Heating Systems: Upgrading to a carbon-reducing, energy-efficient heating system such as an air source heat pump will give the property better a greater heating performance whilst lowering energy usage.
Renewable Energy Sources: Incorporating renewable energy sources like solar panels can boost a property's EPC rating and appeal to buyers.
Adopt Renewable Energy Sources: Consider installing solar panels or other renewable energy solutions to lower your property's carbon footprint and boost its energy efficiency rating.
Seal Air Leaks: Address any drafts or air leaks around windows and doors to prevent heat loss and improve overall efficiency. Also, take time to fill holes in walls around the home to maximise the air tightness of the property.
Switch to LED Lighting: Replace traditional Incandescent lighting with energy-efficient LED bulbs offering instant savings on electricity bills of up to a whopping 80%.
Conclusion
Energy efficiency plays a vital role in determining the value and marketability of properties in the UK. Properties with high energy efficiency ratings offer numerous benefits to buyers, including cost savings, environmental sustainability, and government incentives. Sellers can enhance their property's value by making energy-efficient upgrades, making it a win-win situation for both parties involved in the real estate transaction.
As the trend toward energy-efficient living continues, properties that prioritise sustainability will remain in high demand. It’s time to contact the region’s expert team.
Figures quoted in this article have been calculated using data publically available from Rightmove and the UK Government website. The median EPC rating across Wales, Scotland, and England is a D. To show examples of how much homeowners could increase the value of their property, we have increased the average price of properties in each area by the factor of increase from a D EPC rating to an A/B EPC rating.