Buyers keen to go green but costs remain prohibitive - research

Homebuyers plan to make their homes more energy efficient in the hope of securing more favourable mortgage deals and boosting their property’s future sale price, research suggests.

A survey by Mortgage Advice Bureau (MAB) found 81% of prospective buyers, including first-time buyers, are planning to make energy efficiency improvements to their future homes.

The motivations behind these improvements are varied. The primary reason, cited by 58%, was wanting to lower their monthly utility bills. 

Others also cited financial benefits as a key driving factor, with 22% of prospective buyers hoping that these energy efficient changes could potentially lead to more favourable mortgage deals. Other reasons included 36% believing that these upgrades will enhance the overall livability of their properties. Meanwhile, for 32%, these improvements are seen to make their homes more desirable when it comes time to sell.

Additionally, there is a growing trend of awareness of how eco-friendly homes can have a positive impact on the environment. 44% believe that making their homes more energy efficient is beneficial for the environment. This marks an increase from similar research conducted by MAB last year, which found that 36% of potential homebuyers are considering a higher EPC rated property to be more eco-friendly and able to reduce their impact on the environment. This uptick highlights a growing desire among buyers for properties that align with sustainable practices, including the potential for green mortgages that reward energy efficient homes, MAB said.

However, with interest rates currently high, the feasibility and affordability of such mortgages have become more challenging, the research warns.

For those who don’t plan to make their homes more energy efficient, the primary barrier is cost, with half (51%) of these prospective buyers admitting that the changes are too expensive.

Ben Thompson, deputy chief executive at Mortgage Advice Bureau, said: "The strong interest in energy efficiency upgrades highlights buyers' willingness to retrofit their property, however, they must be supported and enabled to do this. The UK’s housing stock is some of the leakiest in Europe, and to be successful in the race to net zero, this will need to be tackled. 

“This is something both the mortgage industry and the government will need to work on together. Enhancing the attractiveness of green mortgages through increasing the amount that can be borrowed, a lower rate or cashback for example, could be a powerful tool in helping to transition to a more sustainable and environmentally friendly housing sector.”