Homebuyers are paying more for properties with heat pumps or other low-carbon technologies, and are looking closely at energy ratings, according to analysis from real estate agents Savills.
Energy-saving credentials are becoming important considerations for people looking to move house and lower their energy bills. Nearly six in 10 (59%) potential buyers told the company they were willing to pay more for a home powered primarily by renewable energy.
Homes in England and Wales fitted with a heat pump command a premium over average regional prices, Savills found.
Meanwhile, 71% of respondents said a home’s Energy Performance Certificate (EPC) rating – which measures its energy performance – now plays an important role in their decision to buy a property.
Nearly a third (32%) of respondents said they place more importance on EPC ratings than a year ago.
“In the face of rising energy prices, homes that offer more cost-effective monthly alternatives – such as homes with heat pumps – are climbing higher on buyers’ wish list when looking for a new home. home,” said Lawrence Bowles, residential research analyst at Savills.
The vast majority of UK homes still rely on fossil fuels for heating, hot water and cooking, which accounts for more than a fifth of UK carbon emissions, despite government plans to cut emissions.
At a time of skyrocketing energy bills, with further cost hikes expected in the fall, low-carbon alternatives are also seen by some as a way for households to cut costs.
Ministers want to ban gas boilers in new homes from 2025 and could extend the policy to include all new gas boilers from the mid-2030s, after which all newly installed heating systems would have to be on low carbon emissions or be converted. to use fuels such as hydrogen.
The government is turning to electric heat pumps as an alternative – where heat is extracted from the outside air, ground or water and concentrated before being transferred indoors. He unveiled plans to offer £5,000 grants to enable people to install heat pumps and other low carbon boiler replacements and set a target of installing 600,000 heat pumps heat per year by 2028.
However, new technologies are not necessarily cheap to install, and Savills found that homes that run on newer, cleaner energy tend to cost more, according to analysis of average real estate transaction values between 2019 and 2021.
There are more homes running on cleaner forms of heating in London and the South West of England, while homes in the North East rely the most on town gas: nearly nine in 10 properties are heated this way.
The highest average prices are achieved by properties that use district heating systems – where heat from a central source feeds more than one building or dwelling through a network, and can come either from a conventional boiler or of a renewable energy boiler. Homes with community heating systems fetch an average price of 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 investment in newer, cleaner forms of heating,” Bowles said. “It also highlights the huge challenge posed by the zero carbon agenda goals and the uphill battle we face.”
He added that government grants would go some way to helping people reduce the environmental footprint of their homes – including improving home insulation or adding solar panels – but more resources and investment were needed. needed to help reduce the UK’s reliance on fossil fuel heating.
Just under half of households in the countryside use fuel oil for heating, creating a crisis for rural communities that rely on fuel 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.