The RightMove Green Homes report confirms what many in the industry suspect about the appeal of energy-efficient housing to both homeowners and investors.
There is a distinct positive relationship between new-build homes and their energy efficiency. RightMove has now revealed the relationship between energy performance certificate standards (EPCs) and both property value and demand.
The new Greenhouses report has revealed the time between when a property is listed and when it is known as SSC. [sold subject to contract] It is very fast for high end homes.
Properties listed at EPC level B – the second highest point – were sold in an average of 30 days. In contrast, those that scored G in their EPC – the lowest score – took an average of 37 days to sell.
Moreover, the property portal has confirmed that houses with a C EPC rating can fetch an additional 16% in value compared to an F rated property. This is based on the 200,000 homes listed for sale, which are then oversubscribed.
Measuring green houses
Although the property’s green credentials do not directly affect the outcome of the transaction, there is definitely more demand than the energy consumption of the home.
RightMove, one of the most used property portals in the country, reports that there are 73% more green features in property listings than in 2020.
While most buyers are motivated by factors such as location and location, one in 10 people looking to move today cite a greener home as their main motivation, the report says.
For 89% of homeowners, saving money on energy bills is the biggest driver for making improvements to their property. A further 55% want to improve their heating – for heat – 49% want to improve their carbon footprint.
In addition, 41% of property owners add their green credentials to add value to their property, 28% say it will help them sell their home in the future, because people understand the value of sustainability.
Obstacles to improvement
Owners of older properties, both landlords and landlords, must face the changing conversation around energy efficiency in homes.
Andy Sutton, co-founder of SERO, says there are many improvements that can create green homes, but not all are suitable for every property.
“Every house is different and a heat pump will be suitable in most cases, first there may be some fabric improvements,” he said.
“The first step is a proper assessment and planning to see if these are necessary. However, the carbon benefits of heat pumps are huge, especially as we continue to decarbonise the grid.
“Ten years ago, gas was the dominant green energy source, and now it’s electricity, which is amazing.”
Arguably, character traits presented the biggest challenge. Making changes to some homes can be difficult, such as upgrading windows, and the beauty that appeals to some people can be lost in the process.
Kate Eales, Head of Regional State Agency at Strutt & Parker, said: “If poor broadband has been breaking the consensus in recent years, good sustainability credentials are increasingly being considered, especially as energy prices rise.
“That said, homes are homes after all and character continues to hold great value for many. What remains to be seen is how affordable and directly sustainable changes to period properties will be in the long term, which will ultimately help preserve the value of historic homes.
“If buying a home is just a financial decision, a home with a strong EPC will be top of the list.
But buying a period home is often driven by the heart, not the head. EPCs create more transparency so that buyers know what it is like to be a custodian of an older home.
Great job for landlords
The report found that as of May 2022, more than half (56%) of rental properties listed on rightmove have an EPC rating below C. If Government C proposes to implement the minimum legal rent, it will cause problems.
Rightmove research found that 25% of landlords are unaware of their rental property’s EPC rating, and 35% are unaware of proposals to change the Minimum Energy Efficiency Standards (MEES).
For those who need to make improvements, one-third (34%) say they will do so before 2025, 13% say they will do so after 2025, and 25% say they are not sure what to do.
A fifth said they would sell their property if the cost of improvements exceeded the return on investment.
It is uncertain whether these landlords will reinvest in new-build or modern green housing, but there is already evidence that some investors are changing their choices in view of future requirements.