High EPC ratings push up house prices – but by how much?

Posted on Tuesday, June 4, 2024

Vendors could boost the value of their property by around £13,000 on average by improving its energy efficiency, research suggests.

Research by financial website Morningstar has found that while features such as location and property type are the main pricing factors, energy efficiency can play a role in pricing.

Its analysis of a decade of housing transactions between 2013 and 2023 found the average price per square metre of an E, F or G EPC rated property was £3,508.

In contrast, homes with an A, B or C rating attracted a price of £3,643 per square metre.

Based on the average size of a UK home of 97 square metres, according to the English Housing Survey, a low-rated EPC home could cost £340,276 on average compared with £353,371 on a highly-rated property – a difference of £13,000.

Overall, Morningstar’s research suggests there are better financial rewards for homeowners or landlords if a property has a low EPC rating.

It said: “The increase in value resulting from improving a particularly low EPC level is higher than that obtained by improving higher efficiency properties even more.

“The positive impact of higher energy efficiency on price diminishes as the EPC level improves.

“A property with a high efficiency level would have a higher price on average with respect to a property with a low efficiency level.”

The research follows analysis suggesting greener homes can command house price premiums of up to 15%.

Via @EstateAgentToday