Author : Mary-Anne Bowring
The Greener Homes Report by Rightmove has revealed that more property listings are now stressing eco-friendly features as property highlights than before. The online portal says additional incentives are needed to help sellers and landlords enhance the energy efficiency of their properties.
The report also mentions a significant surge in listings citing electric car charging points and 40 percent more listings mentioning this than last year. Additionally, the number of listings highlighting an energy performance certificate (EPC) rating of A-C has increased by 24 percent compared to last year and a remarkable 59 percent since 2019. The report emphasises that these eco-friendly features are becoming decisive factors in a market where prices are becoming increasingly sensitive to the needs and preferences of buyers.
Sellers who have upgraded their properties from an EPC rating of F to C could potentially command an average price premium of nearly 56,000 if selling. And, this is in addition to local house price growth. However, there are stiff challenges in making properties more energy-efficient. These obstacles highlight the need for further support and measures to create sustainable upgrades that are more accessible and viable for property owners. The report reveals that many homes for sale and homes available for rent on the Right Move platform have low energy performance certificate (EPC) ratings of D or below.
Over the past four years, there has been only a marginal improvement in the proportion of houses and flats moving up to at least a C rating. However, the rental market has shown better progress. This is due to legislation making it illegal to rent a property with an EPC rating lower than E, with requirements moving towards a minimum of C.
Since 2019, there has been a steady increase in houses for rent with a C rating or above. The way it is progressing, i.e., the rate that listed properties are now grade C (as a proportion of all properties listed for rent), taking the year-by-year improvement, it would take 43 years for 100 percent of homes for sale and 31 years for homes available for rent in Great Britain to reach an EPC rating of A-C.
To encourage green improvements, the report suggests incentives such as stamp duty rebates should be available for buyers who make eco-friendly upgrades soon after purchase. Other incentives could include perks for energy-efficient homes taking on both new mortgages and remortgages. Or, grants or tax benefits for green technologies like electric car charging points and solar panels.
The existing incentives are not substantial enough to drive a substantial change. Many people are also generally unaware of the various incentives available.
An extensive acceptance of green initiatives will require time and focused attention on specific areas. The report mentions that houses are generally less energy-efficient than flats, and the sales market is not keeping up with the progress seen in the rental market. The main challenge currently is the lack of sufficient suppliers and affordable equipment for homeowners and landlords to procure greening initiatives from. Waiting for government proposals and the availability of green finance options is crucial to addressing this affordability challenge.
Energy-inefficient homes should be history soon. The focus has shifted towards eliminating energy-inefficient properties in new stock - the second-hand market is an enormous challenge. Homeowners and landlords need clear guidance on what steps to take, the right order to implement changes, the reasons behind these actions, and the benefits they will bring. More efforts are required to accelerate this transformation. Arguably, the report is a rallying cry to the government.
Mary-Anne Bowring FIRPM FRICS FARLA FCABE Founder/Head of Asset Management
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