A fifth (22%) of prospective homebuyers plan to make their homes more energy efficient in the hope of securing more favourable mortgage deals, according to research from Mortgage Advice Bureau (MAB).
The research also found that 81% of prospective buyers, including first-time buyers, were planning to make energy efficiency improvements to their future homes.
The primary reason, cited by 58% of buyers, was to lower 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 would enhance the overall liveability of their properties.
For 32%, these improvements were to make their homes more desirable when it comes time to sell.
Additionally, there was a growing trend of awareness of how eco-friendly homes can have a positive impact on the environment.
44% said making their homes more energy efficient was beneficial for the environment.
This marked an increase from similar research conducted by MAB last year, which found that 36% of potential homebuyers were considering a higher Energy Performance Certificate (EPC) rated property to be more eco-friendly and able to reduce their impact on the environment.
This uptick highlighted a growing desire among buyers for properties that align with sustainable practices, including the potential for green mortgages that reward energy efficient homes.
However, with interest rates currently high, the feasibility and affordability of such mortgages have become more challenging.
For those who did not plan to make their homes more energy efficient, the primary barrier was cost, with 51% of these prospective buyers admitting that the changes are too expensive.
The cost of energy efficient upgrades remained a major barrier for many buyers, especially with interest rates remaining high.
MAB said it was therefore crucial for both the Government and financial institutions to collaborate on solutions that support homeowners in making these environmentally beneficial changes, while ensuring they remain financially viable.
This could involve incentives, subsidies, or innovative financing options tailored to promote sustainable homeownership.
Ben Thompson, deputy CEO 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.”
