Energy efficient homes

Demand for energy-efficient homes is going up. Good energy efficiency is now a top requirement for many home buyers. What's fuelling the trend? Are there enough homes to satisfy demand?

The rise in demand for energy-efficient homes

Good energy efficiency is now a top requirement for many home buyers. What's fuelling the trend? And are there enough homes to satisfy demand?

When you buy a home you'll have a list of must-have features. Maybe it's the location, having off-road parking, a certain size of garden or whether your drum-practice is likely to disturb the neighbours. For a lot of us another, less exciting but extremely practical requirement is creeping to the top of the list: is it energy-efficient?

In other words: how much is heating and lighting likely to cost, compared to other properties?

Ongoing concern about energy costs

The cost-of-living crisis continues. And it's not just those on lower or middle incomes who are affected. According to Knight Frank, the high-end estate agent, over a third (35%) of their clientele say that rising energy costs will influence them to buy a more energy-efficient home in future.

In 2022, the cost of electricity and gas rose by 65% and 129%, respectively. This put new pressure on finances for millions of people. While prices have fallen a little since then, they are still taking up a much higher proportion of the average household budget than a few years ago. Unlike eating out or buying new clothes, heating your home isn't something that can easily be cut back. It's an essential. Turning off the heat can be particularly dangerous in winter.

This is why so many home buyers are looking for energy-efficient properties that will help them keep costs down. A lot of them are starting to research domestic energy-efficiency, searching out information to help them make better choices. They're educating themselves on the language of energy performance, learning about the potential for retro-fitting thermal insulation in older homes, and paying more attention to energy performance certificates.

In short: when you're buying a home, you're now very likely to ask about energy bills and what's been done to cut them.

The UK has some of the least energy-efficient homes of any developed country. This is due to a range of factors, including having a large proportion of older housing stock, enjoying years of low energy prices and a lack of attractive upgrade incentives.

So, while energy-efficient homes are becoming much more desirable, they can be frustratingly hard to find. A lot of houses and flats still aren’t using energy as efficiently as they could be.

Rise in concern about the environment

Today's high prices for electricity and gas aren't the only reason why home-buyers are becoming more concerned about energy efficiency. Many of them aren't just concerned about how much they'll be paying each month for heat and light, they're also worried about the price the planet is paying for global carbon emissions.

More than eight out of ten adults in Britain have made changes to their lifestyle to help tackle environmental issues, according to a 2023 survey by the Office of National Statistics.

Some of these changes are about recycling or adjustments to diet. Rising awareness of the environmental costs of fossil fuels, combined with rising energy prices, has made household energy saving a higher priority for many. Finding ways to use gas and electricity more sparingly, isn't just helping save money in the household budget, it's also reducing the burden, however small, on the power stations of the energy industry.

Of course, this isn't just about reducing energy consumption. It's also generating sustainable energy, in ways that are kinder on the environment. Homes that use gas will also be reliant on fossil fuel, but electricity can be generated by other means, such as using solar panels. Energy storage, using electric batteries or thermal stores built into the home, are some of the options available.

What energy conscious home-buyers are looking for

Most home-buyers aren't looking for the latest innovations in energy-saving technology. The absence of an air-source heat pump or triple glazing is unlikely to turn them away from choosing a home that ticks lots of other boxes.

For many, the day-to-day costs of heating and lighting will rate more highly than a property's contribution to global carbon emissions. However, there's a close relationship between the two. Simply ensuring your home has plenty of loft insulation will help bring down your energy bills, because you're putting less demand on the energy industry.

Many of the changes to make your home more energy efficient are relatively easy and inexpensive. We're all about helping you to make them happen.

How a more energy-efficient home can help

The energy efficiency of a home is shown in its energy performance certificate (EPC) rating. It's graded from A-G, with A being the most energy efficient. In England, most (67%) homes have an EPC rating of D which is in the lower half of possible EPC ratings.

If you're looking to buy a home with a higher EPC rating, it will likely have:

• Cavity wall insulation
• Floor insulation
• Loft and roof insulation
• Double glazed windows
• A modern gas boiler
• LED light bulbs

If you're looking for a home with the highest EPC rating, it might also have solar panels or a heat pump to generate heat at a lower cost.

A well-insulated home can be significantly cheaper to heat because it does a better job of keeping the heat in. In fact, we recently conducted a study that found improving the energy efficiency of a bungalow in Edinburgh could reduce its annual energy bill by £1,672. It would also increase its property value by £16,720 and save 4.63 tonnes of CO2.

The future of energy-efficient homes

As the cost of energy remains high, the demand for energy-efficient homes looks set to keep going up. But with so many homes being poorly insulated, the energy-efficient properties are likely to sell at a premium.

Thankfully, new homes are being built to much higher energy-efficiency standards than in years gone by. In the first three months of 2024, 85% of new homes were given an EPC rating of A or B. This increases the supply of highly rated homes in Britain, but only by a tiny fraction. There’s still a long way to go.

At Snugg, we're championing making existing homes more energy efficient. And with most homes in the UK having an EPC rating of D or below, there's significant room for improvement.

Investing in energy-saving features such as improved insulation, double-glazed windows, and renewable energy systems can significantly reduce energy costs (and increase the overall value of a property and reduce carbon emissions). But to capitalise on the opportunity to make millions of homes in the UK more efficient, more needs to be done.

The government's ECO4 and ECO schemes should help many thousands of homes improve their energy efficiency, but we'd like to see the UK government do much more, including:

• Provide further funding for energy efficiency improvements
• Create a centralised database of grants
• Lower stamp duty for energy-efficient homes
• Provide dedicated support for older homes

As more people want to live in energy-efficient homes, upgrading insulation and adding green energy generation to existing homes should become a key priority for anyone looking to sell.