"In over 20 years in financial services, no client has ever told me that energy efficiency was the reason they bought a property or played a part in their decision-making process."
Following the news that energy bills will fall to £1,923 a year for the typical household from October, under the new price cap announced by Ofgem, Newspage asked brokers and property experts how important energy efficiency is for people when buying their homes.
Kirsty Wells, director at Blueprint Mortgages & Protection, said: "I have not come across one borrower yet who has used a property's energy rating as a factor when weighing up which property to purchase."
Riz Malik, founder and director at R3 Mortgages, agreed, stating: "In over 20 years in financial services, no client has ever told me that energy efficiency was the reason they bought a property or played a part in their decision-making process. My clients care more about price, location, amenities and resaleability. It’s a nice-to-have but it is not as important to most people as the government seems to think it is."
Meanwhile, Neezam Romjon, co-founder at Rebus Financial Services, added: "I speak to a lot of first-time buyers and can’t recall a single conversation where the energy efficiency of a property was a primary concern. As always, location and price are the priorities. People understand that their energy costs are likely to be higher, but that is dwarfed by the rise in their mortgage payment if they buy somewhere more expensive that is more eco-friendly."
However, some brokers noted that EPC ratings are more of a concern for their buy-to-let clients.
Stephen Perkins, managing director at Yellow Brick Mortgages, said: "I have never heard anyone mention EPC ratings or energy bills as part of either list. The only clients who have ever factored this in are buy-to-let investors looking D and above, or C and above ideally due to regulations. Energy costs are just one of many increased costs homeowners and first-time buyers need to contend with."
Darryl Dhofferat The Mortgage Expert, commented: "For the homebuyers out there, only a select few I talk to are concerned about the EPC rating on a property and want to do their part for climate change. The majority are more concerned about price, location, and whether they can afford the mortgage. For landlords, you have different conversations altogether, as upcoming requirements for them will require properties to have an EPC rating of C or above by 2028, although I can see that can getting kicked down the road."
Turning to what lenders can do to better incentivise energy efficiency, Joe Stallard, director and adviser at House and Holiday Home Mortgages, said: "Energy efficiency still isn't a driver when it comes to people choosing property. It's falls into the nice-to-have category. There's been a lot of talk about green mortgages, but lenders need to do more if they want to drive real change. Minor cashback or subtle rate improvements just aren't strong enough to make people put energy efficiency near the top of their property requirements."
Scott Taylor-Barr, financial adviser at Barnsdale Financial Management, added: "The Government will at some point have to apply more pressure to improve the energy efficiency of the UK's housing stock and how they do this will be the concern. For example, they could apply tougher rules on lenders creating a much greater interest rate penalty for those buying and owning poor performing homes, or they could amend the stamp duty system to align with the EPC results; so the more inefficient the property, the higher the stamp duty bill to buy it."
