There is currently a modest 1.6% house price premium for an owner-occupied property rated A or B compared to a D-rated home, the latest research from Nationwide shows. This is equivalent to around £4,500 based on the average house price in England.
Energy efficiency continues to have a much greater impact on buy-to-let purchases, where an A or B rated property attracts a 12.2% premium.
49% of younger buyers (those aged 25-34) said energy efficiency is ‘very important’ in choosing a property to buy, while around three quarters (78%) of homeowners would expect buyers to pay more for an energy efficient home.
The latest data from the English Housing Survey shows that 53% of the owner-occupied housing stock is currently rated A to C, up from 21% ten years ago. Part of the improvement is due to newly built properties, which tend to have a much higher energy efficiency rating (around 97% are rated C or above).
What green improvements are homeowners making?
Over half (54%) of those surveyed were not aware of their current property’s energy efficiency rating. Despite this, 77% said that EPC rating would be an important factor when choosing a property to buy in the future.
Of homeowners who had undertaken measures to improve their property’s energy efficiency in the last ten years, the most popular were adding solar panels, improving insulation and upgrading to energy-saving windows and doors.
The main reasons cited for making green improvements were to reduce energy bills (60%) and to make their home more comfortable (48%). Nearly three quarters (73%) said they had seen energy bills fall as a result of the improvements they made.
Only around one in five (22%) said the main reason for the improvements was to ‘increase the property’s value’, with less than one in ten (7%) doing so as part of preparations for a sale. This suggests that most homeowners are mainly focused on their own benefit from the work. Indeed, 77% said they were more likely to remain in their current property longer as a result of the improvements they had made.
Of those who have not made green improvements, the most commonly cited reason is they cannot afford the upfront cost (54%).
A quarter (25%) said such improvements were not a priority, with 19% stating they wouldn’t reduce bills by much. 21% said they were unsure which improvements would be most effective, whilst 17% pointed to a lack of information or understanding of what to do.
Andrew Harvey, Nationwide's senior economist, commented: “Decarbonising and adapting the UK’s housing stock remains critical if the UK is to meet its net zero target by 2050, especially given that emissions from residential buildings account for 15% of the country’s greenhouse gas emissions.
“English Housing Survey data for 2024 suggests 42% of dwellings have the potential to be improved to an EPC ‘C’ rating or higher, with around 2% unable to reach band C, and the remainder already EPC C or higher. In 2024, the average cost to improve homes to EPC C was around £7,500. This implies an overall estimated total cost for upgrading the entire English housing stock of around £81bn. Unsurprisingly, homes rated EPC F or G have considerably higher average costs to reach EPC C compared with EPC D homes (around £17,000 and £6,000 respectively).
“As part of its 2026 Warm Homes Plan, the Government’s current aspiration is to upgrade five million homes by 2030. However, the current pace of improvements is slow, given the scale of the challenge. This suggests a need for further incentives to help decarbonise homes."
