Prospective homebuyers are placing growing importance on a property’s energy efficiency when buying, according to the latest research from Mortgage Advice Bureau.
Of those looking to purchase in the next 24 months, almost three in four (74%) see a home with an EPC rating of an A or B as more attractive than less energy efficiency properties.
While the rules for landlords on minimum energy efficiency standards hangs in the balance, ensuring homes are as energy efficient as possible remains a priority for prospective homebuyers. This is largely driven by the desire to reduce household running costs, as they grapple with the ongoing cost of living crisis and concerns that costs (such as energy bills) will remain elevated.
When looking to cut back on household costs, just over half (51%) of prospective buyers are considering a home with a higher EPC rating to reduce overall utility bills, with 36% looking to keep warmer in winter for less. Almost a third (32%) are considering a higher EPC rated property to potentially reduce their mortgage repayments through green mortgages. Meanwhile, 33% are already thinking about their next step in terms of buying a higher rated property, as this could add value when it comes time to move.
While the financial benefits are key driving factors, wider environmental benefits are also impacting buying behaviours. Over a third (36%) of potential homebuyers are considering a higher EPC rated property to be more eco-friendly and reduce their impact on the environment.
Ben Thompson, deputy CEO at Mortgage Advice Bureau, said: “Despite rumours that No10 will scrap the long-awaited minimum energy efficiency targets for the private rental sector, energy efficiency is climbing up prospective buyers’ wish lists, as they balance property price with future running costs. The high energy costs we’ve experienced in the UK over the past couple of years have hit many people’s finances, stretching budgets to the limit. As a result, any means to cut back on spending, particularly on energy bills, has become a bigger priority for prospective homebuyers.
“As our findings show, mortgage payments are also a central concern to prospective homebuyers. However, the good news is that opting for a higher EPC rated property could make you more likely to be entitled to a green mortgage scheme. These plans reward homeowners for buying or owning an energy efficient home – for example, with potentially lower interest rates on mortgage payments, or incentives such as cashback. If this is something you are interested in, it’s essential to speak to a mortgage adviser, who will be able to establish whether a green mortgage would suit your needs.”
The vast majority of purpose-built flats will be more energy-efficient, but the market for flats is almost dead due to the leasehold scandal and ‘cladding’.
Free up that market by ending leasehold in its present form, make it easier and cheaper to extend leases/buy freeholds, and address the cladding anomaly in lease extensions, and suddenly there will be thousands of energy-efficient homes for sale.
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Some tinkering has been going on. We all know that the band rating is very much in the public domain but more importantly politically. I’ve been doing EPC’s since concept in 2007 and many times told that the software has needed upgrade over the years, another one is due shortly.
I have seen the data returns giving better band readings than in the past or is it my imagination? Two recent assessments came back with Band C and I would have put my money on max E for one and the other a G, max F a few years ago. Seems that as long as you have an average modern home with a mains gas supply boiler you can’t fail a D.
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Perhaps we will all be given a C and thus avoid the need for new rules!
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