Homeowners struggle to fund EPC upgrades despite growing buyer demand

Despite buyers prioritising EPC ratings, homeowners are struggling to afford EPC upgrades, according to new research.

Data from Together reveals that three in four (74%) buyers would be willing to pay more for a home with a better EPC rating, with buyers prepared to spend an average of £5,293 more for a property with improved energy efficiency.

However, despite growing demand for energy-efficient homes, the cost of EPC improvements remains a major barrier.

Half of homeowners (50%) say the cost of upgrades is the biggest obstacle to improving their home’s EPC rating, while 34% are actively considering EPC upgrades but simply cannot afford them.

Rising energy bills put pressure on homeowners

According to the data, nearly three-quarters (73%) are concerned that homes with poor energy efficiency will become increasingly difficult to sell over the next five years.

Nearly two-thirds (63%) say they’d be more likely to make energy-efficiency improvements to their home if affordable finance were available.

Ryan Etchells, chief commercial officer at Together, said homeowners could benefit from financing options that help spread the cost of upgrades.

He said: “Rising energy bills have put pressure on all homeowners’ pockets over the past few years. Savvy buyers are now thinking beyond the purchase price of a property, ensuring they’re aware of what a home will cost to run every month.

“Energy efficiency is a key part of affordability, so homes with lower running costs are becoming more attractive. While owners of less efficient properties may need to invest more upfront to save money in the long run, the benefits of home improvements can counter the costs.

“As many homeowners recognise the benefits of improving energy efficiency, finding ways to spread costs through bridging or second charge loans can help homeowners make the improvements they need whilst also increasing their property’s value and appeal.”

Isles of Scilly have the lowest proportion of energy-efficient homes

The data also reveals the Isles of Scilly have the lowest proportion of energy-efficient homes, with just 12.42% of properties achieving a Band ‘C’ or above. This is followed by Gwynedd in Wales (27.79%), Ceredigion (31.51%), and Staffordshire Moorlands (31.66%).

London dominates the top spots, with Tower Hamlets having the highest proportion of energy-efficient homes, as 82.21% achieve an EPC Band ‘C’ or above. This is followed by Knowsley (74.40%) and Salford (71.18%).

The news comes as the government has proposed all PRS properties will need to meet EPC C targets by 2030.