Only 16% of UK homeowners plan to adopt energy efficiency
Only one in six UK homeowners plan to improve the energy efficiency of their home in the next five years, according to a new research from The Energy Efficiency Infrastructure Group (EEIG).
The findings demonstrate a fundamental lack of engagement with household energy efficiency, and will turn up the heat on the UK government ahead of UN COP26.
The research also found one in eight (13%) UK homeowners strongly considered the energy efficiency of their home when it was bought, one in 12 people (8%) strongly believe that the government is currently doing enough to encourage people to reduce emissions from their homes, and 5% would strongly disagree with the government making energy efficient homes cheaper to buy through higher stamp duties.
London homeowners have greater consideration, with 26% reporting that they took energy consumption into account, compared to just 5% in Wales.
EEIG’s research shows that people are willing to see further government intervention; a popular solution is to make energy efficient homes cheaper to buy through higher stamp duties, as proposed by the EEIG. A green stamp duty incentive is a mechanism that will make energy efficient homes cheaper to buy, and poorer-performing ones less attractive to purchasers, without imposing costs onto already struggling families.
David Adams, spokesperson for the Green Stamp Duty Incentive, Energy Efficiency Infrastructure Group, said even with worries about energy supply, rocketing energy bills and climate change in the press daily, it’s clear from its research this isn’t prompting the magnitude of demand for home energy performance improvements necessary to solve these problems.
"Clearly, government intervention is necessary to change this trajectory, but so far short-term initiatives have failed to deliver the kind of sustained take up necessary," he said.
“This is why, in the absence of any other viable approach to stimulate and support owner occupiers to act at scale, the EEIG is advocating for the Government to deliver a green stamp duty incentive.
"This will make energy efficient homes cheaper to buy and will remind those who are buying a lower performing home of the improvements that are likely to be necessary during their period of ownership. It will also encourage people to start thinking about potential improvements to their homes at the time of purchase and plan ahead to realise the rebate."
He added it is necessary that this type of policy is adopted rapidly to be fair to homeowners and to give the government the chance to reach its target of a 78% reduction of UK greenhouse emissions by 2035.
How the green stamp duty would work:
- As is already a requirement, the energy performance of a house (measured through its EPC) is calculated at the point of sale.
- The energy demand and carbon performance of the home is used to adjust basic SDLT value relative to a ‘neutral’ SDLT level set by HMT (set annually to ensure revenue neutrality).
- To encourage the home buying market to place greater value on energy efficiency, the stamp duty calculation will be adjusted down and up: For a particular house price, the better the energy efficiency, the lower the stamp duty paid.
- If the purchaser undertakes low energy and carbon improvements within the first 24 months and obtains an updated EPC, they would be eligible for a SDLT rebate
- Any recognised improvement in a home’s energy efficiency will reduce the SDLT paid
Homes with highest ratings 'worth £40,000 more'
Homes with the highest energy ratings are worth up to £40,000 more on average compared with less sustainable properties – and environmentally conscious buyers are willing to pay a ‘green premium’ for a more energy efficient abode, according to recent Halifax research. The greatest difference in property price between single EPC bands are those with G and F ratings, with the latter commanding almost £10,000 more on average.
Andrew Asaam, Mortgages Director at Halifax, said the housing market has fluctuated significantly in the last 18 months.
“Increasingly, buyers are recognising that environmentally friendly properties will reduce their monthly energy bills in addition to their personal carbon footprint. With our analysis also finding that greener homes sell for more money, it’s worth seeing what your home’s potential rating could be," he said.
“Homeowners at the lower end of the energy efficiency scale are likely to see the greatest returns on their investments, even from making simple changes like switching to LED bulbs or adding loft insulation. There’s a huge opportunity for more people to get on board with this and reap the rewards.”