New research by the experts at Uswitch mortgages reveals that when looking for a property, more than 4 in 10 UK buyers (43%) would consider paying a premium for it to be more energy efficient.
More than a fifth (22%) of respondents would attach a premium of 20% or higher to a property with an A or B Energy Performance Certificate (EPC) rating.
Based on the average house price in the UK this would work out at around an additional £58,000. Across all respondents who would consider paying more for an energy efficient home, the average premium compared to a property with a lower EPC is 15.5% – equivalent to around an extra £45,000 on average.
The most sought after ‘green’ home features include double or triple-glazed windows. Nine out of 10 buyers (90%) said this is a very or fairly important feature when considering properties.
Energy efficient appliances and HVAC systems are the next most crucial consideration when viewing properties, with 6 in 10 (61%) identifying this as important. More than half of UK property purchasers (53%) also value water conservation features as important in a new home.
Most Valued ‘Green’ Features:
- Double/triple glazed windows (90%)
- Energy efficient appliances/HVAC system (61%)
- Water conservation features (53%)
- Sustainable building materials (51%)
- Solar panels (41%)
Despite the cost of living, the importance of purchasing an eco-friendly property has moved up buyers’ wishlists.
Many lenders offer ‘green mortgage’ deals, which offer incentives to encourage owning an energy efficient home. These incentives vary across lenders and property types but can include more competitive interest rates and additional borrowing.
Uswitch mortgage expert, Kellie Steed, offers tips to buyers looking for an environmentally friendly home, or homeowners considering borrowing to improve energy efficiency:
“With green mortgages, there are a range of benefits available, which vary depending on the specific lender and product, and are mostly based on the EPC rating or potential of your property. These could be a helpful option for residential home buyers, homeowners and buy-to-let investors alike.
“Make sure you opt for the right type of green product: Those looking to improve an older, less efficient homes, either as a purchase option, or in some cases, through the remortgage of your own home, should look at lenders offering green mortgages with cashback or even additional borrowing incentives, This way you can use the money exclusively to improve your home’s EPC rating.
“Landlords can use green mortgages efficiently: Renters also favour energy efficient properties, especially since the cost of living crisis. Green mortgages with additional borrowing could help you make the necessary increase to your EPC rating to remortgage onto a cheaper green rate, while also increasing the overall desirability of your portfolio to potential tenants.
“Don’t forget to factor in savings: While green mortgages can be cheaper than other mortgages in a particular lender’s range, it’s important to remember they could be more costly than a non-green deal with another lender.
“Greener homes are likely to hold their market value for longer as eco elements increase in importance, but remember to consider all options when choosing the right mortgage for your needs. By speaking to a whole-of-market mortgage broker you can compare deals across lots of lenders to find the best deal for you.”