With the world developing a sustainable approach toward almost everything, a country like the United Kingdom can’t fall behind. The UK has been prioritising reducing carbon emissions from buildings, partly because of the 47th G7 conference in June 2021 and the UN Climate Change Conference UK (COP26), which was held in Glasgow in late 2021. The housing market, too, witnesses the effects of this approach. Prospective home buyers clearly want more energy-efficient homes, especially after the government launched a £270 million Green Heat Network Fund to boost low-carbon heating in England.
This article tells you what real estate agents think about the rising demand for energy-efficient houses since they are the most familiar with buyers’ choices.
What have estate agents observed?
A recent Santander study revealed a rising demand for energy-efficient homes, with 85% of estate agents reporting an increase in demand over the previous 12 months. Energy efficiency also increases the property value, which buyers can easily check through online house valuation.
According to the study, 2,000 homeowners and 175 real estate agents think that the property industry is well-positioned to play a significant role in raising buyers’ awareness and comprehension of home energy efficiency as demand rises. Real estate brokers say that homebuyers spend 15.5% extra on average for an energy-efficient home, thus creating a ‘green premium’ in the market.
What are the reasons behind the increase in the demand for energy-efficient houses?
Estate agents attribute the trend to a growing understanding of the need to live more sustainably to stop climate change, a decrease in demand for poor energy-efficient houses, and a rise in lenders’ green mortgage offerings.
- Home buyers prioritising sustainability
The number of people looking for energy-efficient homes has significantly increased, as stated previously. These homes offer a variety of green features, from high-tech insulation to heat source pumps.
Sustainability refers to reducing the environmental impact of all construction-related activities, such as waste management, water use, site management, and building energy use.
The goal of “Eco-homes,” which adhere to fundamental sustainable design principles, is to increase energy efficiency and indoor environmental quality for residents while minimising environmental harm from the building’s construction. 79% of the estate agents surveyed in the Santander research believe there would be a noticeable rise in the number of purchasers looking for homes with an Energy Performance Certificate (EPC) rating of C or higher.
Additionally encouraging was Jeremy Hunt’s autumn budget announcement of a new Energy Efficiency Taskforce, which might assist people in improving the energy efficiency of their homes.
- Poor energy-efficient houses are not a popular choice
Estate agents observe a rise in demand for energy-efficient homes as well as a decline in interest in properties with low EPC (Energy Performance Certificate) ratings. Nearly three-quarters (72%) of real estate brokers say they have witnessed homeowners struggle to sell a home because of low energy efficiency in the previous year. A property with a low EPC rating takes three months longer to sell, according to three-quarters (74%) of estate agents, who have altered their advised price due to shifting demand.
As four out of five estate agents (79%) expect there will be an increase in sellers who are having trouble selling because of low energy efficiency, this trend is likely to grow more widespread.
- Lender’s green mortgage offerings
Numerous businesses are already providing appealing financial options for potential homeowners eager to go green in response to the interest in sustainability. Significantly, a number of lenders encourage the purchase and renovation of real estate that is more environmentally friendly, and this is reflected in the offers that are offered for homes with higher EPC ratings.
In 2022, a growing number of lenders added green mortgage products and incentives to their selection, while Minimum Energy Efficiency Standards (MEES) mandated that rental properties have an EPC rating of an ‘E’ at minimum.
The take of estate agents is remarkable and shows that there has been a noticeable shift in buyers’ preferences for properties with lower energy expenses in an era of increasing cost of living.
The benefits are obvious, and any adjustments made would lower buyers’ expenses and increase the property’s appeal to buyers in the future because the findings clearly demonstrate a ‘green home premium.’
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