Homebuyers are prepared to pay a 9.4% ‘green premium’ for an energy efficient property, research from Santander has revealed.
The study which surveyed more than 2,300 UK based homebuyers and owners, estate agents and mortgage brokers, found that buyers are more than willing to pay a premium on homes that have already been retrofitted.
The 9.4% uplift equates to an average premium of £26,600 – more than double the average cost of making green upgrades to a property.
Graham Sellar, head of mortgages at Santander UK, said: “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.”
Estate agents also report that buyers are paying an average 15.5% more for a home that meets high energy efficiency standards, with over a third reporting buyers are paying more than 20% extra in their area.
As well as this, a further 79% say they are seeing more buyers ask about energy efficiency than they were twelve months ago.
The study also found that would-be buyers now rate energy efficiency as one of the most desirable features of a home.
While there was a trend during the Covid-19 pandemic for buyers to want a bigger garden or home office, energy efficiency is now cited as more attractive than these features as rising energy costs become a concern.
When asked what they would be most likely to invest in for their home today, 36% of people picked an energy efficient boiler while only 27% chose the more traditional upgrade of a new kitchen.
While the research found evidence that consumers are increasingly aware of the benefits of having and buying a green home, it also suggested a knowledge gap when it comes to understanding what they need to consider in order to make their homes more energy efficient.
Sellar added: “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.”
