Homeowners could reduce their energy bills by approximately £400 annually, according to a new study from Nationwide Building Society. However, Britain's largest building society reports that buyers are still placing only a modest premium on greener, more cost-efficient homes.
Energy Efficiency and House Prices
Nationwide's analysis reveals that homes with top energy performance certificate (EPC) ratings of A or B are worth just 1.7% more than similar properties rated D, the most common EPC band in the UK. Conversely, the least efficient homes, rated F or G, are valued at about 3.5% less than comparable D-rated properties.
Andrew Harvey, senior economist at Nationwide, stated: "Our analysis suggests that a more energy efficient property rated A or B attracts a modest premium of 1.7% compared to a similar property rated D. Overall, our research suggests that, for now at least, energy efficiency has only a modest influence on house prices for owner occupiers."
Cost of Improvements and Savings
Government figures cited by Nationwide indicate that upgrading a typical home to an EPC rating of C can save around £400 per year on energy bills, though the average cost of the work is approximately £8,100. The government aims for as many homes as possible to achieve EPC band C by 2035 as part of efforts to cut carbon emissions and reduce energy consumption.
The cheapest measures include switching to LED lighting, installing smart heating controls, thermostats, and insulation. Medium-cost options involve loft insulation, cavity wall insulation, double or triple glazing, and boiler replacement. The most effective but expensive measures are heat pumps, solar panels, and batteries.
For owners of the least efficient properties (rated F or G), installing all recommended energy-saving measures could cut bills by an average of £1,780 a year, although the work could cost more than £25,000.
Progress and Challenges
Nationwide noted that Britain's housing stock has become more efficient over the past decade, with around 40% of homes now rated C or above, compared with just 14% in 2009. However, approximately 60% of homes remain rated D or below, highlighting the scale of the challenge.
Mr. Harvey added: "The value that people attach to energy efficiency is likely to change over time, especially if the government takes measures to incentivise greater energy efficiency in future." The study comes as households continue to seek ways to cut energy costs following years of elevated gas and electricity prices.
