Landlords with properties carrying poor Energy Performance Certificate (EPC) ratings could face greater challenges when selling, as buyers increasingly consider the future cost of running a home.
Research from lender Together found that buyers would be willing to pay an average of £5,293 more for a property with better energy efficiency.
The survey of 2,000 UK adults also found that 73% believe homes with poor energy efficiency could become harder to sell over the next five years.
Energy costs are becoming an increasingly important factor when people choose a property. Around 45% of those surveyed said lower energy bills were among their key priorities when buying a home.
Energy Efficiency Becomes More Important
Together’s chief commercial officer, Ryan Etchells, said rising energy costs had made buyers more aware of how much a property could cost to run.
Rather than focusing only on the purchase price, prospective buyers are increasingly looking at ongoing household expenses, including energy bills.
This could make properties with better EPC ratings more appealing, particularly for buyers concerned about affordability and long-term running costs.
For landlords, this could mean that properties with lower energy efficiency face greater scrutiny from potential buyers.
Cost Is A Barrier To Improvements
Although many homeowners recognise the benefits of improving energy efficiency, the cost of carrying out upgrades remains a major obstacle.
Half of those surveyed identified the expense of making improvements as their biggest barrier.
A further 34% said they were considering energy efficiency improvements but could not currently afford to carry them out.
Access to affordable finance could encourage more homeowners to make upgrades. Nearly two-thirds of respondents said they would be more likely to improve their property if suitable financing was available.
Solar Panels Among Top Priorities
The research also looked at the types of energy efficiency improvements that buyers are interested in.
Solar panels were the most sought-after feature among those surveyed, followed by triple glazing and loft insulation.
The findings suggest that buyers are increasingly considering how energy-efficient features could reduce the ongoing cost of owning a property.
For landlords thinking about selling, investing in improvements could therefore potentially make a property more attractive to buyers, although the financial return will depend on the individual property and the cost of the work.
EPC Ratings Vary Across England And Wales
Together also examined EPC ratings across different areas of England and Wales, looking at the proportion of homes achieving EPC band C or above.
The Isles of Scilly had the lowest proportion, with just 12.42% of homes achieving a C rating or better.
Gwynedd and Ceredigion also recorded relatively low proportions.
At the other end of the scale, Tower Hamlets had the highest share, with 82.21% of homes rated EPC C or above.
Knowsley and Salford ranked second and third respectively.
What Does This Mean For Landlords?
The research highlights the growing importance of energy efficiency when properties are bought and sold.
Landlords considering selling a property with a poor EPC rating may need to take into account the potential impact on buyer demand and the price buyers are prepared to pay.
While upgrading a property can involve a significant upfront cost, improvements such as better insulation, glazing or renewable energy systems could make homes more appealing to buyers concerned about future energy bills.
With energy efficiency becoming a bigger consideration in property decisions, landlords may increasingly need to weigh up the cost of improvements against the potential impact of leaving a property with a poor EPC rating.
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