Demand grows from buyers for energy-efficient homes

Demand grows from buyers for energy-efficient homes

10:12 AM, 9th November 2022, About 11 months ago 3

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Home buyers are spending an average of 15.5% more for an energy-efficient property, research reveals.

The findings from Santander show that four in five estate agents (79%) are predicting a big rise in buyers wanting homes with an Energy Performance Certificate (EPC) rating of C or above.

And nearly three-quarters (70%) of agents have seen homeowners struggle to sell their property if it has poor energy efficiency – and 79% of agents predict this to rise in the next 12 months.

This could be an issue for landlords who are thinking about selling up before the expected tightening of EPC regulations in 2025 when rented homes will need to meet the minimum rating of C.

Researchers also found that due to shifting demand, three-quarters (74%) of estate agents have changed the property’s price based on the EPC rating and say it takes three months longer to sell a home with a low EPC rating.

Estate agents will play an important part

Santander’s Buying into the Green Homes Revolution report has found estate agents will play an important part in increasing awareness and understanding among buyers of home energy efficiency, as demand for green homes increases.

Researchers asked 2,000 homeowners and 175 estate agents their views on retrofitting and found 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 this down to the rising costs of energy bills (54%), alongside an 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.

Not knowing the EPC rating of the property

But 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 12 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 year to make energy efficiency information more prominent.

‘Preference among buyers for homes with reduced energy costs’

Graham Sellar, Santander’s head of business development – mortgages, said: “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.”

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15:46 PM, 9th November 2022, About 11 months ago

Supposing you have an existing rental property and you are looking at what might be required to upgrade your EPC in time for 2025. The total cost of all the improvements is £15-20,000. One of the recommendations in the EPC (the number one recommendation) is cavity wall insulation. You have an open mind about the other recommendations, but cavity wall insulation causes damp:

Once the damp problem occurs it doesn't just cause mould and insulation problems, it also causes the wall trusses to corrode.

The last article claims that up to 2 million homes could have problems with incorrectly fitted cavity wall insulation. And it's not an easy problem to fix once you've put the foam in the walls. Many landlords are under pressure to fit it prior to 2025, either to keep their properties rentable or to sell at a higher price. Many owner occupiers are also under pressure to fit cavity wall insulation in order to access grants to upgrade their boilers.

(1) If we assume that this survey data contains correct information and the more energy efficient properties cost 15.5% more, is the pressure to invest all the money to move to an EPC of band C going to increase rents?

(2) Will those properties that come onto the market that have had cavity wall insulation fitted by landlords just to make them saleable be storing up problems for the future owners of the properties?

(3) For those landlords who choose to stay and rent what can they do if the homes have got damp problems caused by cavity wall insulation and they have tenants in their properties?

(3) Who will be liable for those problems given that it was a recommendation in the EPC to fit cavity wall insulation and you can't market or rent your home without an EPC at band D and possibly band C by 2025?

The Grenfell enquiry seems to have descended into an argument with everybody saying everybody else was responsible for all those deaths; but that is basically an argument about building regulations for insulation that caught fire when it wasn't supposed to. Nobody seems to be accountable. So if this pressure to fit cavity wall insulation to houses that shouldn't have it results in millions of property owners with a problem they can't fix, who is going to be responsible for that? Just as the science behind the insulation at Grenfell that caught fire doesn't seem to have been very robust the science behind the current EPC system doesn't look that robust either.

And what do you do if your EPC assessors says that the building should have cavity wall insulation, but you do not agree because you are concerned about damp?


17:37 PM, 9th November 2022, About 11 months ago

From my experience with renovating victorian properties. One of the main issues I face in pretty much every single house is that of debris in at or around the damp course. This is easy to resolve, remove bricks, rake rubbish out to below damp course and resolve the bridging issue. However, I can't beleive the people pumping insulation into cavities will even consider this, let alone do it. The last three houses I've actually removed the blown 'small balls' insulation as the house was 'sweating' I can see a lot of damage being done to comply with EPC's. After the insulation has been installed and the house sweats, you'll need to install a positive input ventilation system ( about £350 ex. fitting ) to force cold air from the loft into the house, which in turn then forced humid / damp air out of the house....


17:43 PM, 9th November 2022, About 11 months ago

Reply to the comment left by Paul at 09/11/2022 - 17:37
So these are victorian houses with cavity walls with debris in the cavity walls at or around the damp course?

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