Energy criteria high on UK homebuyer checklists, survey finds

Homebuyers are paying more for properties with heat pumps or other low-carbon technology installed, and are looking closely at energy ratings, according to analysis by the estate agents Savills.

Energy-saving credentials are becoming important considerations for people who are looking to move and reduce soaring energy bills. Nearly six out of 10 (59%) prospective buyers told the company they were willing to pay more for a home primarily powered by renewable energy.

Homes in England and Wales that have a heat pump fitted command a premium over average regional prices, Savills found.

Meanwhile 71% of people surveyed said a home’s energy performance certificate (EPC) rating – which measures its energy performance – now played an important role in their considerations over whether to buy a property.

Almost a third (32%) of people said they put more importance on EPC ratings than they did a year ago.

“Faced with increasing energy prices, homes that offer more cost-efficient monthly alternatives – such as homes with heat pumps – are climbing higher up buyers’ wishlists when searching for a new home,” said Lawrence Bowles, residential research analyst at Savills.

The vast majority of British homes still rely on fossil fuels for heating, hot water and cooking, accounting for more than a fifth of the UK’s carbon emissions, despite government emission reduction plans.

At a time of spiralling energy bills, with further cost rises expected in the autumn, low-carbon alternatives are also viewed by some as a one way for households to lower their costs.

Ministers want to ban gas boilers in new-build homes from 2025, and may extend the policy to include all new gas boilers from the mid-2030s onwards, after which date all newly installed heating systems would have to be low-carbon or be converted to use fuel such as hydrogen.

The government is looking to electric heat pumps as an alternative – where warmth is extracted from the outside air, ground or water and concentrated before being transferred indoors. It has unveiled plans to offer £5,000 grants to allow people to install heat pumps and other low-carbon boiler replacements and set the target of installing 600,000 heat pumps a year by 2028.

However, new technology is not necessarily cheap to install, and Savills found that homes that run on newer and cleaner energy tend to cost more, according to analysis of the average values of house transactions between 2019 and 2021.

There are more homes that run on cleaner forms of heating in London and south-west England, while homes in the north-east are most reliant on mains gas: almost nine out of 10 properties are heated this way.

The highest average prices are obtained by properties which use community heating schemes – where heat from a central source supplies more than one building or dwelling via a network, and can come from either a conventional boiler or a renewable energy-fired boiler. Homes with community heating schemes reach an average price over £550,000, according to Savills, while those with heat pumps have a slightly lower average value of £483,935.

“In many areas housing values would not necessarily support the investment in newer and cleaner forms of heating,” Bowles said. “It also highlights the enormous challenge set by the zero-carbon agenda targets and the uphill battle ahead that we face.”

He added that government subsidies would go some way to help people to lower their homes’ environmental footprint – including improving home insulation, or adding solar panels – but more resources and investment were needed to help reduce the UK’s reliance on fossil fuel heating.

Just under half of homes in the countryside use oil for heating, creating a crisis for the rural communities who are dependent on oil deliveries. As a result, Savills said those hoping to buy in the countryside are increasingly looking for places with space to install a heat pump.