Buyers willing to pay 6% premium for greener homes - claim

Almost half of home buyers would pay a premium for more energy efficient properties, research suggests.

Analysis by Barclays found 47% of homeowners agreed they are willing to pay extra for properties that have already undergone key energy efficiency-related retrofitting modifications. 

These include having an air source heat pump fitted as well as solar panels, loft and pitch roof insulation and double or triple glazed windows.

When thinking about their own home, homeowners said they could be willing to pay around £23,000 more for the same sized property with all of those four key energy efficiency changes installed.

This represents an almost 6% premium, Barclays said.

This figure climbs to £30,000 among homeowners with a house worth between £500,000 and £900,000.

The Barclays study revealed a gap between what homeowners actually paid on average to make energy efficiency-related changes to their home, and the amount survey respondents expected to pay on average for the same modifications.

The largest discrepancy was found to be the anticipated price of loft and pitch roof insulation, which respondents thought was more than two and half times more expensive than homeowners actually paid on average.

The data also showed that homeowners think the installation of some modifications will take longer than the time works actually take to complete, which could be particularly off-putting to hybrid and homeworkers who want to minimise disruption.

It comes as Barclays extends its Greener Home Reward scheme which offers eligible residential mortgage customers up to £2,000 to make selected home energy efficiency-related improvements.

No additional lending is required to benefit from the scheme and all eligible new and existing Barclays UK residential mortgage customers can sign up. Customers must register for the cash reward online and then make and pay for a selected home energy efficiency-related improvement.

Matt Hammerstein, chief executive of Barclays UK, said: “Doing more across the UK’s housing stock to manage carbon emissions and increase energy efficiency in homes will help offset energy costs. 

“That’s why we have decided to extend registrations for our Greener Home Reward until the end of January 2024 to support more customers in heating and powering their homes more efficiently.
 
“Our research identified myths and misconceptions about how long it takes to make energy efficient modifications and the costs involved, while our extension will also enable us to obtain greater insights to help us develop new products and services for our customers. We hope this extension opens the door to more homeowners planning improvements – while also providing a welcome financial boost to help them make changes ahead of next winter.”