How eco-friendly is your home? Understanding how energy efficiency is impacting our notion of value.
1 November, 2023
Our housing stock, built in a different age for colder and wetter weather, is woefully unsuited to the higher temperatures of recent summers and experts are already saying that retrofit work will be necessary in the coming years if our homes are not to burn energy on air conditioning. Of course, until recently, energy efficiency was framed more in terms of how our houses effectively retained heat rather than neutralised it. What the current about-turn proves is that the impact of the climate upon our homes and the impact of our homes upon the climate is a complex one. It is one which, for good reason, is starting to impact our concept of property value.
One way or another, our homes will be judged in the future as much for their energy performance as anything else. Even now, most properties in estate agency windows are bestowed a notion of value by the declaration of an Energy Performance Certificate (EPC), effectively allowing would-be buyers to know if and what they should expect to pay for upgrade works in the future. The cost-of-living squeeze and high energy prices have meant there is an added incentive to understand what our future liabilities on a property will be and assess its value accordingly.
Home energy use accounts for nearly a fifth of the UK’s total emissions, rising in recent years due to an increase in working from home. Some 36% of UK homes were built before the end of the Second World War and at least 75% is predicted to still be in use by 2050. This ageing stock will need huge amounts of work if we are to reduce its energy demand.
In 2021 the National Housing Federation released a report that calculated for the first time that England’s 25 million homes – which produce 58.5 million tonnes of CO2 every year – are emitting the equivalent of the average annual use of cars. There are 27 million cars in use in England, emitting 56 million tonnes of CO2 annually. Emissions from our homes are so high thanks to a combination of gas central heating and poor insulation that the average household in England is currently producing more CO2 every year just by living in their home than they are by driving.
Despite these figures, the UK Government recently announced roll backs on environmental measures in the context of ongoing cost-of-living pressure and an expected general election in 2024. The announcement included delays to the target for eliminating the sale of gas boilers. Instead, homeowners must replace their gas boilers with electric heat pumps when boilers need replacing. Despite the roll backs, encouraging investment in greener homes is still clearly a priority for the Government, with boiler upgrade grants being doubled to £7,500. This ongoing tension between needing to reduce the environmental burden of homes and being conscious of homeowner’s wallets is a tightrope that any policy makers must walk.
Now more than ever we are sensitive to how much energy we use in our homes, and what we can do to reduce it. The EPC of a property is quickly becoming the universal starting point, as it appears to measure the energy efficiency of our homes and what we need to improve. Ratings of any kind appeal to us instinctively. They are short-hand for how we might apportion value. But we should take care when we do this.
The EPC is far from perfect and yet it is now becoming the recognised starting point for understanding what can be done to a property in terms of energy efficiency and how we measure it. It is valid for ten years, which is too long as a lot can happen to a property in that time. That timeframe needs to be shortened to reflect a property’s reality more accurately. As the Government continues to review the efficacy of EPCs and sharpen their effectiveness, their impact on our understanding will further evolve and complement other behavioural elements – for example how a resident uses energy.
They are the start of something we can all hang our collective hats on when assessing the value of a property. But we should recognise many elements of energy efficiency are already informing value. In a recent survey, property surveyors remarked how features like electric car charging points are affecting buyer’s perceptions of a house value – as are more conventional issues like insulation, triple glazing, and solar heat panels. However, not all of these things are part of the EPC and not all of them are technologies that will stand the test of time (or they may evolve).
A rating grade like an EPC might be handy for informing decisions if it is accurate and measuring the right things, but it still makes it difficult for buyers and homeowners to really know what problems they have, how much to invest in fixing those problems and in which order to sort them out. Thankfully, there are surveyors who can help with understanding what improvements will make the most impact on the energy efficiency of your property and its overall value.
Energy efficiency tips
Electric car plug
Electric cars are 85-90% more energy efficient than internal combustion cars.
Double-glazed windows can reduce heat loss or heat gain by almost 30%.
Wall insulation can cut the amount of energy you need to cool and heat your home by 25%.
Today, most solar panels provide an energy efficiency rating between 11-15%.
A high efficiency, gas-fired condensing boiler is one of the most economical ways to heat a home.