Estate agents report that home buyers are prepared to pay a premium for energy efficient properties.
According to Santander’s Buying into the Green Homes Revolution report, property purchasers are spending an average of 15.5% more for an energy efficient home.
Four in five estate agents – 79% – surveyed predict a significant increase in buyers seeking properties with an Energy Performance Certificate (EPC) rating C or above.
Almost three quarters – 70% – of estate agents have seen homeowners struggle to sell their property due to poor energy efficiency, with 79% predicting this to rise in the next twelve months.
Due to shifting demand, three quarters (74%) of estate agents have changed the recommended price of a property based on the EPC rating and report it taking three months longer to sell a property with a low EPC rating.
The study found that agents are poised to play an important part in increasing awareness and understanding among buyers of home energy efficiency, as demand for green homes increases.
The research, which asked 2,000 homeowners and 175 estate agents, their views on retrofitting, found that there is a distinct growing interest among home buyers for energy efficient properties, with 85% of estate agents reporting increased demand in the past twelve months.
Estate agents put it down to the rising costs of energy bills (54%), alongside increased number of green mortgage products from lenders (45%) and a greater awareness of the need to live more sustainably to combat climate change (51%).
Not only is there growing awareness but estate agents report this is creating a ‘green premium’ in the market, with buyers spending on average 15.5% more for a property with a high EPC rating.
While homeowner engagement is growing, there remains a knowledge gap, with three in five – 60% – not knowing the EPC rating of the property they currently live in.
The research shows that estate agents are being proactive in helping bridge this gap, with two thirds (66%) in the past twelve months undertaking training to improve their knowledge, and a further 29% planning to do so in the future. In addition, three in five (61%) have updated their marketing materials in the past twelve months to make energy efficiency information more prominent.
Not only are estate agents seeing a rising demand for energy efficient homes, but they are also noting a decrease in demand for homes with poor EPC ratings. In the past twelve months, nearly three quarters (70%) of estate agents report seeing homeowners struggle to sell a property due to poor energy efficiency. Additionally, the time it takes to sell is on average three months more compared to a property with a good EPC rating. This trend is likely to become more common as four in five estate agents (79%) predict in the future there will be a rise in sellers struggling to sell due to poor energy efficiency.
Graham Sellar, head of business development – mortgages at Santander, commented: “The feedback from estate agents is striking and reveals that in an environment of rising cost of living pressures, there has been a real shift in preference among buyers for homes with reduced energy costs.
“Estate agents will be a key part of raising understanding and awareness among buyers and sellers on the benefits of having an energy efficient home, so it is encouraging so many are being proactive in improving their understanding. With the findings showing a clear ‘green home premium’, the benefits are clear, and any changes made will not only reduce buyers’ bills but make the property more attractive to buyers in the future.”