A report issued out to the public yesterday by mortgage lender Santander shows that an increasing number of property purchasers are willing to pay more for energy efficient homes as the increased costs to heat and power a property starts to impact the general public.
This year, the UK and a large portion of the world as a whole, started to see a large increase in the cost of energy prices. This is mainly due to the ongoing war in Ukraine as both Ukraine and Russia are substantial providers of fuel to the rest of the world. According to the UK parliament’s ‘Commons Library’:
‘Wholesale energy prices increased rapidly from the second half of 2021 onwards. Many consumers were protected, at least initially, by the energy price cap which was just under £1,500. It was increased by 12% in October 2021 but rising wholesale prices led to a much larger increase of 54% in April 2022. Continued increases in wholesale prices led Ofgem to announce a further planned increase of 80% on 1 October 2022.
The April increase was equivalent to £700 more across a year for ‘typical’ levels of dual fuel consumption paid by direct debit. The October cap would have been an increase of almost £1,600. The rapid increase in prices in late 2021 led suppliers to withdraw cheaper fixed price tariffs. At the end of August around 24 million of 28 million households were on Standard Variable Tariffs (SVTs) which are controlled by the price cap.’
The UK government has announced an initiative to put another cap on energy bill prices, pledging to from the extra cost that suppliers are asking themselves, however, there has been little mention of this since the announcement several weeks ago.
In their recent study, Santander spoke to homebuyers, homeowners, mortgage brokers and estate agents to see if the energy crisis has had any impact on buyer’s preferences. The study from Santander found that buyers are potentially willing to pay an extra 9.4% for a property that is already classed as energy efficient. That means properties that have solar panels, high performing energy equipment, extra insulation, LED lighting, and extra insulated windows among other things. This works out to around an extra £26,600 on top of the average UK house price.
In the report, Santander also say that estate agents have told them that buyers are paying around 15.5% more for a home that already meets high energy efficiency standards rather than the normal industry standard. 79% of estate agents said that they are also seeing more enquiries about energy efficient homes than they did a year ago.
What Does Santander Think About The Study?
Head of mortgages at Santander Graham Sellar has commented on the findings of the report saying:
“There appears to be a clear increase in the desirability of energy efficient properties as people face the reality of rapidly increasing energy bills, with today’s buyers more likely to pay a premium for a retrofit than a fitted kitchen.
“But there is a huge amount of work to be done to ensure homeowners understand the changes they need to make and the importance of both the economic and environmental benefits of making them. Lenders, government, construction companies and others in the housing industry need to come together to support people and policies that will drive forward widespread change.”
Speak To An Advisor Today
Are you thinking about buying an energy efficient home or even raising some money on your property to pay for an energy efficient upgrade? Give our team a call today to see what options might be available for you. Some lenders offer competitive and exclusive mortgage products for energy efficient properties, so you might end up getting an even better deal. Call our advisors today.