The rise in demand for energy-efficient homes

If you’ve ever bought a home, you’ll probably have put together a list of must-have features. For many people, a garden and off-road parking are common requirements. But now there’s another, admittedly less exciting, requirement that’s making its way onto people’s lists: energy efficiency.

Energy cost pressures

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.

During 2022, the cost of electricity and gas rose by 65% and 129%, respectively. And this has put pressure on millions of people’s finances. Unlike eating out or buying new clothes, heating your home isn’t something that can easily be cut back. It’s an essential cost, and turning off the heat can be particularly dangerous in winter. So many potential home buyers are looking for energy-efficient homes that can keep the costs down.

Unfortunately, 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 energy-efficient homes aren’t just desirable, now that energy costs are increasing, they’re a rare commodity too.

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

And 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 increase. But with so many poorly insulated homes available, energy-efficient homes 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 last three months of 2022, 87% of new homes were given an EPC rating of A or B. This should help satisfy some demand for energy-efficient housing, but it won’t be enough to meet demand.

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.