A new study suggests the sale value of a property is scarcely improved at all by having energy efficient features.
The study by Nationwide says:
- There’s a 1.6% house price premium for an owner-occupied property rated A or B compared to a D-rated home;
- Around three quarters (78%) of homeowners would expect buyers to pay more for an energy efficient home;
- 49% of younger buyers (those aged 25-34) say energy efficiency ‘very important’ in choosing a property to buy;
- Property rated A, B or C could save around £400 per year on energy costs versus a D-rated property;
- Adding solar panels most popular measure amongst homeowners who have made green improvements; and
- Upfront cost Is the biggest barrier for those who have not made any green improvements.
The Nationwide’s analysis of the latest data from the English Housing Survey is aimed chiefly at owner occupied properties.
It shows that 53% of the owner-occupied housing stock is currently rated A to C, up from 21% ten years ago.
Part of the improvement is due to newly built properties, which tend to have a much higher energy efficiency rating (around 97% are rated C or above).
Older properties, particularly those built before 1919, tend to have much poorer energy efficiency ratings.
For example, around 24% of dwellings in England built before 1919 have an EPC rating of E to G, compared to just 2% of those built after 1990.
English Housing Survey data for 2024 suggests 42% of dwellings have the potential to be improved to an EPC ‘C’ rating or higher, with around 2% unable to reach band C, and the remainder already EPC C or higher.
In 2024, the average cost to improve homes to EPC C was around £7,500. This implies an overall estimated total cost for upgrading the entire English housing stock of around £81 billion.
Unsurprisingly, homes rated EPC F or G have considerably higher average costs to reach EPC C compared with EPC D homes (around £17,000 and £6,000 respectively).
As part of its 2026 Warm Homes Plan, the government’s current aspiration is to upgrade five million homes by 2030.
However, the Nationwide comments that the current pace of improvements is slow, given the scale of the challenge. This suggests a need for further incentives to help decarbonise homes.
Andrew Harvey, Nationwide’s senior economist, comments: “Decarbonising and adapting the UK’s housing stock remains critical if the UK is to meet its net zero target by 2050, especially given that emissions from residential buildings account for 15% of the country’s greenhouse gas emissions.
“… Using data for homes in England, we examined the extent to which those buying properties pay a premium (or discount) due to EPC rating. Our research also included other property characteristics (such as bedrooms, location and whether it is newly built) to estimate the impact on prices.
“Our analysis suggests that a more energy-efficient property rated A or B attracts a modest premium of 1.6% compared to a similar property rated D.
“This is equivalent to around £4,500 based on the average house price in England.
“There is little difference for properties rated C or E, compared with D.
“We do see a small discount for the least energy efficient properties however, with an F or G rated home valued 1.4% lower than a similar D rated property.
“This equates to around £4,000 in cash terms.”
“It is interesting to note however, that energy efficiency continues to have a much greater impact on buy-to-let purchases, where an A or B rated property attracts a 12.2% premium.”
