A new study has found that improving your home’s energy efficiency rating can add as much as 14% to its selling price later down the line, with some homes increasing in value by as much as £40,000.
If your house’s EPC rating goes up, it’s value increases by at least 6% on average
England’s first large-scale study into the effects of energy efficiency on a home’s sale price has just been completed by DECC. Scientists from the University of Cambridge, University College London and Reading University looked at the repeat house sales of over 325,950 properties sold in the England between 1995 and 2011. They looked at how much each property sold for when it was sold for the first time in the period studied, then at how much it sold for at a later sale, as well as whether the property’s energy efficiency rating had changed. Their findings were significant at a national level and on a regional level in many areas too, finding that on average a property whose rating rises from a G to an F-C increases in value by 6-10% respectively on the second sale, with properties attaining an A/B rating increasing by 14% – on a £200,000 property this is a tidy £28,000.
The study is called “An Investigation of the Effect of EPC Ratings on House Prices” and it’s full findings are available here.
Energy and Climate Change Minister Greg Barker said of the study:
“We have long known the benefits of making energy saving improvements to the home, but this study is real evidence of the huge potential rewards. Not only can energy efficient improvements help protect you against rising energy prices, but they can also add real value to your property. This Coalition is committed to helping hardworking families with the cost of living. The Green Deal is designed to do exactly that.
“The Green Deal is helping more people make these types of home improvements, reducing high upfront costs and letting people pay for some the cost through the savings on their bills. The Green Deal is a great option for anyone wanting to improve the look, feel and potentially the value of their home.”
James Brooks of Brooks Estate Agents said:
“For the majority of the UK we are seeing that there is a new factor dictating a home’s saleability. With fuel bills continuing to rise, buyers are becoming more and more conscious about the energy efficiency of their prospective new homes and are willing to invest more in a property now if they know it will cost them less to run in the future.
“As such, we always try to advise our customers to consider the real S.A.L.E. value – Size, Aesthetics, Location and Efficiency – when buying or selling.”
Kevin McCloud, broadcaster and host of Grand Designs, said:
“There are some 26 million homes in Britain, most of them about as well insulated as a rabbit hutch, and they need immediate help to be made less wasteful. This timely report tells us what we suspected all along: that people really value the well-insulated, energy-efficient home; that modest investment in measures to make our homes more comfortable, healthier and cheaper-to-run really pays off.
“The Green Deal is now maturing into a helpful way of financing a lot of the retrofit solutions around. Homeowners can now start to make these changes, alleviate the burden of high energy bills and improve the value of their prime asset.”
Which are the best energy saving home improvements for adding value to my home?
It should be noted that the study doesn’t look at what’s inside each house, as in, which energy saving improvement each property had installed as well as what other home improvement work they had done. However, there is a good rule of thumb that you can use when judging if installing an energy saving home improvement is going to add value in your house. According to to the estate agents we spoke with on the ground, how much money an energy saving improvement can add to your property’s value largely depends on how much money the improvement will save your prospective buyers – the more it’ll save them on their bills, the more value it’ll add.
This can be savings on their bills gained from improvements that have been fully paid for already, such as insulation, or savings gained through the Green Deal, where they effectively pay for the improvement through the savings on their bills and hopefully save some money in the process, or through a scheme like the Feed-In Tariff which pays them for generating electricity using their Solar PV or Micro-CHP system.
You can get more of an idea of how much money an improvement will save you by using our handy energy assessment tool – it takes your home’s features into account and suggests the improvements that will be most likely to save you and your prospective buyers money.