How can energy efficiency measures increase the value of my property?
Energy efficiency measures can positively impact the value of your home. The constant impetus behind energy efficiency, the cutting of CO2 emissions and the spectre of climate change are all factors forcing homeowners and builders to strive for improvements in energy-saving measures continually.
Cutting annual fuel bills for ordinary households in the UK, such action could be increasing house values across the country. The steadily rising energy prices are forcing many people to look for ways of cutting bills, and a home that is already equipped to deliver such savings will usually be very attractive to buyers.
Evidence suggests energy efficiency measures are having a positive effect on property values
According to the Department of Energy and Climate Change (DECC), now part of Department of Business, Energy & Industrial Strategy, some key energy efficiency improvements to home have the potential to increase net property values by up to an average of 14 per cent in the UK. However, that figure has been proven to be as high as 39 per cent in some areas of England. According to the DECC, a home that can upgrade its Energy Performance Certificate by two bands can add on average more than £16,000 to its property valuation – but a home in the northeast of England could increase its market value by an astonishing £25,000!
As climate change initiatives start to get more challenging for governments – and as the cost of energy continues to rise – it seems more than likely that pressure on householders to cut their energy use will increase. It appears that an excellent energy efficiency rating has become a significant contributing factor to property prices in the UK, and its influence will probably only grow over the coming decades.
The government is, in part, responsible for the drive towards domestic-fuel efficiency. Their Green Deal is helping people to make energy efficiency improvements to their home for a fraction of the market cost. Some householders qualify for free or subsidised energy efficient boilers, cavity wall insulation and solar panels, and that financial help is helping many property owners to increase the value of their home.
While the cost of installing double-glazed windows and other fuel efficiency measures may seem prohibitive to some homeowners, such improvements considered an investment for the future, the potential fuel savings over ten years are enormous compared to the initial outlay. But perhaps more significantly, homeowners can add a premium to their property valuation by ensuring its EPC certificate places it in the first three grades of energy efficiency (A, B or C).
Rises in house prices make energy efficiency measures worth the expense
On the face of it, ensuring a home is energy efficient is an expensive prospect. However, the full benefit of improvements in energy efficiency ratings needs measuring in the context of 10 years. A ground source heat pump, for instance, extracts warmth from under the ground and transfers it to a home’s heating system. At the cost of £9,000, this represents just £900 per year. With government subsidies and the subsequent savings on energy bills, this is a relatively small annual cost. Solar panels cost around £5,000 for the average house, and a biomass burner installed for less than £12,000. Compared to the potential rises in property prices purported by the DECC, the cost of these improvements makes sound economic sense.
Whether you believe that climate change is man-made or not, there is no escaping the fact that property values in the UK are being affected by the cost of energy and government-sponsored efficiency schemes. Your house is not only a home; it is an investment that needs considering. If you improve beyond the minimum energy efficiency standards for your home now, you could reap the rewards in the future.
“How energy efficiency measures can increase property values” is brought to you by Flying Homes.