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Homebuyers pay £40,000 more to live in the most efficient properties

Energy prices are rising and homebuyers pay a ‘green premium’ of £40,000 to live in the most efficient properties rather than less sustainable homes.

Environmentally conscious home movers faced with rising energy prices are willing to pay a ‘green premium’ of up to £40,000 more to live in efficient properties, says Halifax, rather than in less sustainable homes.

Homeowners must have an Energy Performance Certificate (EPC) when they sell their homes, rating the property from A being the greenest to G being the least greenest.

See how much your monthly mortgage payments would be if you trade-up to an energy efficient home at this link:
Mortgage cost calculator with instant results and figures for an energy efficient property.

The research of energy efficiency done by the Halifax of property prices in England and Wales, shows that homes in all regions sold at higher prices as the energy performance improved.

Value added with better ERC ratings

There are 7 EPC ratings and as the energy efficiency of the average on the market property increases, people are willing to pay more and this produces the ‘green premium’.

For first time buyers purchasing a new build, the property is likely to have an impressive EPC rating and be very efficient which will help to keep your energy costs down.

This table from Halifax shows the ‘green premium paid by homebuyers when selecting a property with a higher EPC rating.
Change in EPC Price Increase
B to A £4,740
C to B £5,214
D to C £5,214
E to D £6,162
F to E £7,584
G to F £9,954
A property with an EPC rating of C is £11,376 more expensive than a property with rating of E and reflects the financial benefits of more efficient homes.

Homebuyers are willing to pay the biggest difference for a property rating of F compared to a rating of G where the premium is £9,854 more to buy.

There are regional green hotspots with highly efficient new-build homes such as Tower Hamlets in East London with an average EPC rating of C followed by Salford in Greater Manchester.

In contrast, older communities in rural regions with older properties are the least efficient homes such as Isle of Scilly and Welsh districts of Gwynedd and Ceredigion.

If you are an older homeowner thinking about relocating and buying a new property with energy efficient credentials that attracts a ‘green premium’, you can use equity release to trade-up without any evidence of earnings.

The survey found that two-thirds of people would like to own an environmentally friendly home and that their property reflected their personal values.

Of current homeowners, two in five said that the energy efficiency level of their home was fairly or very important when considering where to live, even more so energy prices are rising rapidly.

How to make your home efficient

More than three quarters of homeowners do not know the energy rating of their property but could benefit from lower household bills and increase the market value of their home.

For remortgage buyers with equity in their property, very low interest rates would allow you to release capital to improve your home's energy rating and increase its value at the same time.

Some lenders even offer cashback to first time buyers, home movers, shared-equity and shared-ownership buying a new-build home with an EPC rating of A or B.

Improving the energy efficiency of your home could involve simple changes such as replacing your light bulbs with LED bulbs or adding draught proofing to external doors.

You can use smart thermostats to heat your home more intelligently as it learns the most effective way to keep you warm using the least amount of energy.

Upgrading your boiler with a modern heat exchanger will make your home greener and more energy efficient, reducing your bills in the long term and you can investigate which systems are most effective for your property type.

If you live in a house you could add some solar panels which have become cheaper and more efficient, helping you to reduce your bills by using green renewable energy from the sun.

What are your next steps?

Speak to our LCM mortgage advisers if you are planning to move home to an energy efficient home and want the best mortgage deal. Learn more by using the property value tracker chart and equity release calculator.

Start your free home moving quote and we can find the best mortgages and lowest rates for your energy efficient home at this link:
Free mortgage quote with the lowest mortgage rates for your greener property.

If you are releasing equity from your home to make it more efficient, we can recommend lifetime mortgages so begin your equity release quote for the latest provider offers.

Mortgage Best Buys

These are examples of mortgage products we can approach with many more offering interest rates and flexibility to meet your needs.

1.17% Fixed Rate
60% Loan to Value
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Until 31/09/2022
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1.19% Fixed Rate
60% Loan to Value
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2-Years Time
Reverts to 3.59%
1.16% Fixed Rate
60% Loan to Value
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60% Loan to Value
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Until 31/10/2022
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