A cutting-edge report, supported by the Department for Business Energy and Industrial Strategy, confirms a direct correlation between energy efficiency improvements in homes and resale value.
The VALUER (Valuations And Lending Underwriting Energy Reduction) report, produced by energy tech company Sero, Monmouthshire Building Society, The Royal Institution of Chartered Surveyors (RICS) and Rightmove, also found that homebuyers were increasingly looking for ‘green’ features when searching for a new home. Highlighting a particular rise in searches for items like electric car charging points, solar panels, and heat pumps – suggesting that homebuyers are recognising the importance of these for future homes.
Property expert, Tim Bannister, at Rightmove, said:
“We followed 200,000 property transactions over a two-year period, and it was clear that homeowners that had made improvements to the energy efficiency of their home and subsequently increased their EPC rating, were fetching a higher resale value than those that hadn’t made any improvements.
Cerys Williams, Finance Partnerships Manager at Sero, who has been at the forefront of the Optimised Retrofit programme in Wales to improve the energy efficiency of affordable homes across Wales, said:
“With such compelling evidence to prove that ‘green’ technologies increase property value, I am confident this will help to support the adoption of retrofitting ‘green’ technologies into homes across the UK.”
“Sero's existing Pathway to Zero survey allows homeowners to understand their home's current energy efficiency and provides them with a clear route to decarbonising their home, mapping out the costs as well as highlighting which energy efficient improvements should be undertaken and in which order. For each Step of their Pathway, they'll see the impact undertaking the measures will have on their energy bills, their EPC and SAP score as well as their carbon emissions. This enables them to make informed decisions and budget for future planned works.”
The problem now facing homeowners is the upfront costs of making these ‘energy efficient’ improvements to their homes so Sero is now looking for support from the UK Government. The Government needs to implement either funding schemes, incentivisation or policy updates for developers. There is also the need for an appropriate assessment tool, regulated by the RICS, to help homebuyers understand from the outset, what improvements will be required to make their home more energy efficient.
In the meantime, the report presents a scalable solution that enables lenders to offer homeowners support on their decarbonisation journey, knowing that additional borrowing for the installation of ‘green’ technologies will provide a return on investment in the future.
Sam Rees, Senior Public Affairs Officer at RICS added:
“The energy performance of our homes has never been more important, considering the current energy and cost-of-living crisis we are facing. As the VALUER Project demonstrates, and as we see new regulations proposed and come into effect, energy performance can have an impact on property value.
“The VALUER Project has helped shape the work RICS professionals have in undertaking property valuations and the important role they can provide in giving impartial, expert advice on energy performance improvements.”
By providing specialist information to homeowners seeking to undertake energy improvements within their current home, Sero is hoping to assist the UK Government in their aim to tackle the decarbonisation of the current UK stock and assist the Welsh Government in their net zero climate pledge.
